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Renewable Energy
Accelerating Energy Delivery for a Growing Economy
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solar home systems installed
annual power demand growth
renewables target by 2030
year tax holiday for clean energy projects
Bangladesh is positioning itself as a regional hub for renewable energy, driven by strong policy direction, growing industrial demand, and abundant natural resources. With over 27,000 MW in installed power capacity, the country is steadily increasing its renewable share, now above 5%, led by solar across both on-grid and off-grid systems. With actual peak power generation at approximately 15,000 MW, there is significant headroom for investment in efficient, scalable renewable energy solutions that can unlock grid performance and meet rising demand.
Power demand is growing at 7% annually, with peak demand projected to surpass 25,000 MW by 2030. In response, the government’s draft renewable energy policy sets ambitious goals: 20% of total power from renewables by 2030 and 30% by 2040. The roadmap includes incentives for local manufacturing, battery storage integration, competitive electricity trading, and targeted fiscal and financial support for investors.
With high solar irradiance, biomass availability, and rising energy needs, Bangladesh offers compelling opportunities in solar, biomass, and waste-to-energy. Backed by clear policy momentum and infrastructure upgrades, the country is building a future-ready platform for clean energy investment and innovation.
Growth Drivers
Expanding Capacity
Bangladesh’s renewable energy capacity stands at 1,559 MW, with solar leading the mix at 1,265 MW (81%), followed by hydro (230 MW) and wind (63 MW). The solar market is projected to reach 3.9 GW by 2030, growing at a CAGR of 38.6% (2025–2030).
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Natural Advantage
High solar irradiance (5 kWh/m²/day), viable wind (3–4.5 m/s), and tidal potential support diverse RE projects.
Policy Momentum
Solar home systems reached 6M+ users; land-efficient innovations scaling up. Strong regulatory push from BERC & SREDA providing supportive tariffs and encouraging smart energy solutions for flood-prone zones.
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Rising Investment
Foreign direct investment (FDI) in the energy sector reached $3.48 billion in 2022. Transition from Independent Power Producer (IPP) model to Merchant Power Plants enables direct energy sales, unlocking competition and efficiency.
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Cost Competitiveness
The Levelized Cost of Electricity (LCOE) for solar in Bangladesh ($97–135/MWh) is becoming competitive with gas ($88–116/MWh) and cheaper than coal ($110–150/MWh), with future cost reductions expected by 2030 and 2050.
Strategic Renewable Energy Targets
Targets of achieving a 30% renewable energy share by 2040, backed by strong growth in solar, wind, tidal, and biogas projects. Opportunities like low-cost greenhouse-based agri-solar systems (€90–150/m², the cheapest in Asia) expand the country’s renewable energy diversification.
KEY PLAYERS
- Tax Exemptions: Renewable energy projects enjoy tax holidays of up to 10 years, depending on location and project type, to encourage local and foreign investments.
- Duty-Free Imports: Solar power sets for Export Processing Zones (EPZs) are duty-free, while other renewable equipment faces 25–26.20% import duties. Accelerated Depreciation: Companies can depreciate renewable energy assets faster, improving investment returns.
- Government Financing: Low-interest loans and grants are available through government and international partnerships to support project financing.
- Power Purchase Agreements (PPAs): Long-term PPAs are guaranteed, providing stable returns for private renewable energy investors.
- Special Economic Zones (SEZs): SEZs offer favorable tax rates and business incentives for green energy projects.
- Net Metering for Solar Power: Businesses and households can sell excess solar energy back to the national grid.
- Green Bonds: Launched to raise sustainable capital for renewable energy initiatives.
- International Partnerships: Bangladesh accesses global climate finance and encourages joint ventures in renewable energy.
- Ministry of Power, Energy and Mineral Resources (MPEMR)
- Sustainable and Renewable Energy Development Authority (SREDA)
- Bangladesh Power Development Board (BPDB)
- Infrastructure Development Company Limited (IDCOL)
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