Financing hurdles threaten renewable energy growth

Bangladesh's renewable energy sector faces a host of challenges-from land scarcity, access to finance, and high upfront investment costs to inadequate data, poor documentation, and gaps in information sharing, speakers said.
The industry also struggles with high import duties and VAT on raw materials, absence of dedicated zones for sectoral growth, and weak coordination among stakeholders, they said.
Yet, opportunities exist. Sustainable finance frameworks, a sustainability rating methodology, and Bangladesh Bank's refinancing schemes offer low-cost funding windows that could ease the transition towards greener energy solutions, according to them.
They were addressing a roundtable discussion titled "Unveiling Solar Rooftop Finance: Towards a Sustainable Energy Future" at the Westin Hotel in the capital on Tuesday. The event was jointly organised by Bangladesh Sustainable and Renewable Energy Association (BSREA) and ActionAid Bangladesh.
The event was presided over by BSREA President Mostafa Al Mahmud and moderated by ActionAid Bangladesh Country Director Farah Kabir, with Bangladesh Bank Deputy Governor Nurun Nahar present as the chief guest. The keynote paper was presented by Khondkar Morshed Millat, former Director (Sustainable Finance Department) of Bangladesh Bank.
Speaking on the occasion, BSREA President Mostafa Al Mahmud said, "In the new policy, the target has been set to generate 20 per cent of total electricity from renewable sources by 2030 and 30 percent by 2040. Among these, there is a target to install 3,000 MW of rooftop solar by December 2025".
"Although there is potential in this sector, the big obstacle is financing. Currently only 5.6 per cent of electricity is coming from renewable energy, which is much less compared to our neighbouring countries," he pointed out.
Mahmud said, "At present there is no alternative to rooftop solar. This is now the most rapidly implementable, sustainable and effective solution.
While presenting the keynote paper, Khondkar Morshed Millat, said the share of renewable energy in Bangladesh's green finance has declined despite overall growth, falling from 4.82 per cent in FY2018-19 to 3.85 per cent in FY2022-23, according to Bangladesh Bank data.
Renewable energy accounted for Tk 3.44 billion out of total green finance in FY2018-19, compared with Tk 7.83 billion in FY2022-23.
Also present at the event were representatives from the Power Division, SREDA, IDCOL, various power distribution companies, commercial banks, non-bank financial institutions (NBFIs), development finance institutions (DFIs), development partners, renewable energy sector leaders, and representatives from civil society.

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