AFTER almost seventeen years, Bangladesh has unveiled a revised version of its Renewable Energy Policy, aiming to ensure that at least 20 per cent of the country鈥檚 total electricity supply comes from renewable sources by 2030 and 30 per cent by 2040. The policy promises lucrative incentives, including ten years of corporate tax exemptions for both public and private renewable energy producers, followed by five years of partial exemption, alongside a waiver of import duties on solar equipment. It also allows consumers from all segments 鈥� domestic, industrial and commercial 鈥� to install renewable energy systems and sell surplus electricity under the Net Metering Guidelines 2018.
At a broader level, the policy envisions the decarbonisation of the energy sector, reducing reliance on fossil fuels and creating a low-carbon economy through solar, wind, biomass, waste-to-energy, biofuels, geothermal, tidal, hydro and green hydrogen technologies. It also encourages innovations such as peer-to-peer energy trading, floating solar projects, solar irrigation, electric vehicle charging infrastructure and battery energy storage systems. The goal is to achieve 6,145 MW of renewable capacity by 2030 and 17,470 MW by 2041. However, despite these ambitions, significant gaps remain in both policy design and implementation.
The most critical challenge lies in financing. According to the Institute for Energy Economics and Financial Analysis, achieving the renewable targets will require Bangladesh to invest $933鈥�980 million annually until 2030 and $1.37鈥�1.46 billion a year until 2040. Yet, by 2023, the energy sector had received only 3.6 per cent of the funds it needed. Banks and non-banking financial institutions financed just Tk742 crore in renewable projects against an estimated requirement of Tk 20,500 crore, as per a study by the Bangladesh Institute of Bank Management. Although there is some international support, including a 350 million Euro loan from the European Investment Bank and a 45 million Euro grant from the European Union, this remains far below the annual requirement.
The proposed Sustainable Energy Development Fund could have offered a pathway to fill this gap, but the policy fails to specify its governance structure or funding sources, further weakening investor confidence. Moreover, provisions that the government may provide incentives or might grant duty exemptions create ambiguity. Such language casts doubt on the government鈥檚 commitment to implementation and discourages investment. Confidence has also been shaken by the suspension of 31 utility-scale renewable projects for which Letters of Intent were issued through non-competitive bidding.
Beyond finances, institutional fragility continues to be a major impediment. The Sustainable and Renewable Energy Development Authority has been tasked with developing the roadmap, setting standards, and monitoring projects. Yet, without clear deadlines, milestones and accountability mechanisms, the commitment risks remaining on paper. Land scarcity adds another layer of complexity. Although the policy suggests utilising khas land, fallow fields, water bodies, agrivoltaics and floating solar systems, bureaucratic delays, vested interests and local resistance often stall progress. In coastal areas such as Cox鈥檚 Bazar, proposed wind projects could even face conflict with fishing communities unless consultations and compensation are properly ensured.
The government鈥檚 target of achieving 3,000 MW from rooftop solar by December 2025 also appears overly ambitious, given systemic constraints such as low standards, weak enforcement, high import tariffs, limited technical capacity, and financing hurdles. The gaps become starker when compared regionally. Of Bangladesh鈥檚 total 1,616 MW of renewable capacity, only 245 MW, a mere 0.8 per cent, comes from rooftop solar. In contrast, Sri Lanka generates 1,347 MW of rooftop solar, making up 23 per cent of its renewable mix, while Pakistan鈥檚 15,000 MW rooftop solar accounts for roughly 25 per cent of its renewable capacity. Import duties remain another barrier, despite the recent reduction of inverter duty to 1 per cent from June 2025, as taxes on Fibreglass Reinforced Polymer walkways and Direct Current cables remain high.
The revised policy also falls short in terms of inclusion and social equity. It overlooks the agency of women and youth, two key demographic groups in the energy transition. Rural women, who often manage household energy use and lead small-scale solar or microgrid initiatives, are not recognised as stakeholders. Similarly, the potential of youth, who comprise two-thirds of Bangladesh鈥檚 population, to drive innovation and entrepreneurship in sustainable energy has been ignored. Equally concerning is the absence of a Just Transition framework, a key principle in global climate policy to ensure that the shift to renewables does not marginalise workers or vulnerable communities. Without such a framework, the transition risks exacerbating existing inequalities rather than alleviating them.
Addressing these challenges requires strategic, institutional and public interventions. Strengthening SREDA must be a priority, ensuring it is equipped with adequate resources, skilled personnel and accountability mechanisms. The policy should also include a time-bound roadmap with measurable milestones, performance indicators and designated responsibilities to avoid the implementation gaps of the past. An effective coordination framework among relevant ministries is essential to prevent fragmented efforts.
Furthermore, a comprehensive financing and investment plan must be developed to integrate public funds, private capital, foreign direct investment and climate finance. Transparent land acquisition, fair compensation and conflict-resolution mechanisms will be crucial for social acceptance. The inclusion of Just Transition principles, alongside the empowerment of women and youth as agents of change, will ensure a fairer energy transformation. Above all, the government must replace vague and non-committal language with binding commitments, clear incentives and robust governance mechanisms to translate its renewable ambitions into tangible results.
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SM Saify Iqbal is a climate policy specialist at Oxfam in Bangladesh.