Dhaka:Researchers and energy experts have advocated for soft financing terms, increased grants, and support from development banks to stimulate investment in Bangladesh's renewable energy sector. They emphasized the need for easing financing conditions and reducing investment risks to accelerate the energy transition without exacerbating the government's debt burden.
According to Bangladesh Sangbad Sangstha, a study by Change Initiative indicates that Bangladesh requires an annual investment of approximately $154 crore in the renewable energy sector until 2030. However, the current annual investment is only $19 crore, resulting in a financing gap of about US$135 crore each year. The study was presented at a national dialogue held at CIRDAP in the city, chaired by State Minister for Environment, Forest and Climate Change Sheikh Faridul Islam, with State Minister for Foreign Affairs Shama Obaed Islam as the chief guest.
The study underscored that merely increasing investment would not suffice to expand renewable energy; affordable financing terms are also crucial. Recommendations included providing grants to lower project preparation costs, introducing development bank guarantees to share lending risks, and ensuring affordable loans in local currency. M Zakir Hossain Khan, Co-founder and CEO of Change Initiative, highlighted the importance of expanding renewable energy to achieve energy sovereignty and reduce reliance on imported fossil fuels.
State Minister Shama Obaed Islam pointed out the government's targets of generating 20% of the country's electricity from renewable sources by 2030 and 30% by 2040. She stressed the need for transparency, coordinated investment, and stronger climate diplomacy to meet these goals. An analysis revealed that Bangladesh's loan-to-grant ratio in climate financing was nearly six times higher than the average for least developed countries.
The study also proposed the establishment of the Renewable Energy Sovereignty Facility (RESF) to pool resources for renewable energy investments. This facility is expected to reduce the need for new sovereign borrowing significantly. Former Director of Bangladesh Bank's Sustainable Finance Department, Khandaker Morshed Millat, advocated for setting green financing targets and enhancing coordination among financial stakeholders.
The dialogue concluded with calls for concrete government action to reflect commitments in expanding renewable energy, reducing fossil fuel dependence, and addressing climate-induced challenges.