Bangladesh’s draft National Renewable Energy Development Strategy (2026-2030) has the potential to unlock one of the country’s largest private infrastructure investment opportunities of the coming decade. It establishes an ambitious vision for renewable energy to contribute 20 per cent of national electricity generation by 2030, requiring approximately 27,000 GWh of renewable electricity annually and an estimated 10,000-12,000 MW of additional renewable energy capacity. Central to this ambition is the deployment of 5,500 MW of rooftop solar, 4,500 MW of utility-scale solar, together with wind, waste-to-energy, floating solar, agrivoltaics and other emerging renewable technologies.
These are ambitious targets. Delivering this vision is likely to require around US$8-10 billion of investment across renewable generation, battery storage, transmission infrastructure, grid modernisation and associated energy systems. Mobilising capital at this scale will require not only continued support from international development finance institutions and foreign investors, but also increasing participation from Bangladesh’s own commercial banks, financial institutions, capital markets and domestic private sector. Viewed in this context, the strategy is far more than an energy policy. It is an investment strategy. Its success will therefore depend not only on the renewable energy targets themselves, but equally on Bangladesh’s ability to create an investment environment capable of attracting long-term private capital at competitive financing costs.
Encouragingly, the draft strategy reflects a significant evolution in policy thinking. Unlike previous renewable energy policies, it recognises that achieving meaningful scale requires financing, battery energy storage, transmission planning, carbon markets, energy efficiency, institutional coordination and private sector participation. It also candidly acknowledges that previous renewable energy ambitions have been constrained by financing challenges, administrative complexity, investment barriers and fragmented implementation.
As the strategy remains under consultation, there is now an opportunity to strengthen several areas before it is finalised. The objective should be to strengthen the investment and implementation architecture that will determine whether these ambitions translate into completed projects.
LEARNING FROM INTERNATIONAL EXPERIENCE: International experience consistently demonstrates that ambitious renewable energy targets alone rarely deliver large-scale deployment. Successful renewable energy markets have generally combined clear policy direction with predictable regulation, bankable procurement frameworks, coordinated institutions and mechanisms that progressively reduce investment risk.
Among emerging economies, India provides one of the clearest examples. When the National Solar Mission was launched in 2010, installed solar capacity was approximately 10 MW. Today, installed solar capacity exceeds 150,000 MW, while total renewable energy capacity has surpassed 220,000 MW. Over little more than fifteen years, the sector has attracted more than US$100 billion of investment while renewable electricity costs have fallen dramatically through competitive auctions, improved project bankability and lower financing costs.
The significance of India’s experience lies not simply in the scale of deployment, but in the policy framework that enabled it. Competitive auctions increased transparency and investor confidence. Standardised contracts reduced contractual uncertainty. Solar Parks lowered development risk by addressing land acquisition before projects reached investors. Green Energy Corridors ensured transmission infrastructure expanded alongside renewable generation. Dedicated institutions coordinated procurement and implementation, while manufacturing incentives supported the development of domestic industry. Together, these measures systematically reduced investment risk, enabling projects to secure lower-cost financing and deliver increasingly competitive electricity tariffs.
The lesson for Bangladesh is not to replicate another country’s model. Every energy market has its own institutional, regulatory and economic context. Rather, the lesson is that successful renewable energy markets are deliberately designed to attract long-term investment. Financing costs fall when projects become more predictable. Investors commit capital when procurement is transparent, institutions are capable and project risks are appropriately allocated. Over time, these improvements reinforce one another, lowering electricity costs while accelerating renewable energy deployment. This distinction is important because it reframes how the draft strategy can be viewed. The objective is not simply to deliver additional renewable capacity. It is to create an increasingly investable renewable energy market capable of attracting sustained private capital over many years.
From Financing To Project Bankability: The draft strategy appropriately recognises the importance of financing renewable energy investment. As Bangladesh moves from strategy towards implementation, one opportunity would be to explicitly recognise project bankability as a strategic policy objective. This does not necessarily require significant new fiscal commitments. Rather, it involves continuing to strengthen procurement documentation, contractual risk allocation and financing structures so that renewable energy projects can consistently secure long-term limited-recourse financing on competitive terms. Bangladesh has already established a strong contractual foundation through its standardised Power Purchase Agreements and Implementation Agreements. As renewable deployment accelerates, consideration could be given to periodic bankability reviews of these documents against evolving international project finance practice and lender expectations. Such reviews would not seek to redesign the contractual framework but rather ensure that procurement documentation continues to support competitive long-term financing as the market matures. Areas for periodic review could include payment security arrangements, lender protections, curtailment provisions, change-in-law mechanisms, refinancing flexibility and dispute resolution procedures.
Four Strategic Enhancements: Project bankability, however, is not determined by contractual provisions alone. It is shaped by the wider investment environment within which projects are developed, procured and implemented. Strengthening that wider ecosystem therefore becomes equally important. International experience suggests four complimentary enhancements that remain entirely consistent with the strategy’s existing direction.
1. Reduce Project Development Risk: One of the greatest barriers to renewable energy investment is that developers are often expected to assume significant development risk before projects become financeable. Securing suitable land, obtaining environmental approvals, undertaking grid studies, negotiating transmission access and completing permitting processes can take years before financing discussions even begin. Internationally, governments have increasingly sought to reduce these early-stage risks. Bangladesh’s proposal to identify suitable government land provides an excellent foundation that could be expanded into a comprehensive National Renewable Energy Project Pipeline. Rather than simply identifying potential sites, projects could be progressively prepared through preliminary environmental screening, land verification, transmission studies, indicative tender schedules and standardised technical documentation before being offered to investors.
Developers would then compete to construct projects rather than devote considerable time and capital to assembling projects from the ground up. This approach offers two important benefits. First, it reduces project development timelines. Second, reduced development risk generally results in more competitive bidding and lower electricity tariffs.
Equally important is procurement certainty. International experience demonstrates that investors commit capital more readily when governments publish transparent multi-year procurement programmes rather than relying upon individual project announcements. A visible pipeline provides confidence not only to developers, but also to manufacturers, contractors, lenders and equipment suppliers, encouraging investment throughout the wider supply chain.
Transmission planning deserves equal attention. Around the world, transmission infrastructure has become one of the principal constraints on renewable energy deployment. Renewable generation and transmission therefore cannot be planned independently. The strategy already recognises the importance of grid modernisation. This could be strengthened further through the identification of Renewable Energy Corridors, ensuring that transmission investment is planned alongside future renewable procurement rather than following it. Such coordination reduces connection delays, limits curtailment risk and provides significantly greater certainty for investors.
2. Build Domestic Renewable Energy Capability: Perhaps the greatest opportunity presented by the draft strategy extends beyond electricity generation itself. Countries that have benefited most from the renewable energy transition have not simply generated more renewable electricity. They have captured increasing shares of the renewable energy value chain.
The draft strategy appropriately recognises opportunities for local manufacturing. This represents an important starting point. However, Bangladesh’s long-term opportunity extends beyond manufacturing solar modules or importing renewable technologies. A broader renewable energy ecosystem could encompass engineering services, EPC contractors, operations and maintenance, testing and certification, digital monitoring systems, specialised financial services, technical training, research capability, battery assembly, mounting structures, switchgear, transformers, electrical equipment and associated supply chains. Such an ecosystem would generate skilled employment, attract foreign direct investment, strengthen domestic engineering capability and support wider industrial development beyond the electricity sector.
3. Create Long Term Market Demand: The draft strategy rightly recognises the important role of net metering in accelerating rooftop solar deployment. This is particularly significant given the strategy’s ambitious target of deploying 5,500 MW of rooftop solar by 2030. Unlike utility-scale projects, achieving this objective will depend primarily on investment by factories, commercial buildings, industrial parks, universities, hospitals, airports and other large electricity consumers, making private sector participation fundamental to success.
As deployment accelerates, there may be value in periodically reviewing the net metering framework to ensure it continues to support investment at scale while maintaining efficient grid operation. Complementing this with streamlined grid interconnection procedures, commercial financing solutions and standardised rooftop solar implementation processes could further accelerate distributed renewable energy deployment.
Looking further ahead, the strategy could also signal the future development of an enabling framework for Corporate Power Purchase Agreements, particularly for commercial and industrial consumers. Across many renewable energy markets, Corporate PPAs have become an increasingly important mechanism through which businesses procure renewable electricity while supporting investment in new generating capacity. As international buyers increasingly seek lower-carbon supply chains, these will become an important competitiveness tool for Bangladesh’s export industries.
As Bangladesh’s renewable energy market evolves, the strategy could also consider a phased pathway towards Renewable Purchase Obligations (RPOs) for large electricity consumers. Combined with an enabling framework Corporate PPAs, RPOs can create predictable demand for renewable electricity, stimulate private investment and support the expansion of rooftop solar.
4. Strengthen Delivery and Implementation Capability: Large infrastructure programmes rarely succeed because of policy alone. They succeed because institutions are capable of delivering them. The draft strategy already allocates responsibilities across multiple ministries and agencies. Given the scale of implementation required, consideration could also be given to establishing a Renewable Energy Investment and Delivery Unit within the Power Division. Major infrastructure programmes often fail not because policy is weak, but because no single institution is responsible for driving implementation across multiple agencies.
The purpose would not be to create another institution or layer of regulation. Rather, it would provide dedicated coordination across project preparation, procurement, investment facilitation, transmission planning, implementation monitoring and inter-agency cooperation. Experience from infrastructure programmes around the world demonstrates that strong delivery capability often determines whether ambitious policies succeed or remain largely aspirational. Similarly, transparent implementation reporting could further strengthen investor confidence. An annual Renewable Energy Delivery Report tracking projects awarded, under construction and commissioned, investment mobilised, transmission infrastructure completed and implementation timelines would provide valuable transparency while reinforcing accountability.
From Strategy to Delivery: Bangladesh’s draft National Renewable Energy Development Strategy represents an important step forward. The consultation process provides an opportunity to strengthen this foundation further. Explicit recognition of project bankability, the development of an investment-ready project pipeline, coordinated transmission planning, continued refinement of procurement frameworks, greater private sector participation and stronger implementation capability would complement the strategy’s existing direction while enhancing its ability to attract long-term investment.
The next challenge is to ensure that the final strategy delivers not only an ambitious vision for renewable energy, but also the institutional, regulatory and investment framework needed to realise it. Consideration could also be given to publishing a Renewable Energy Implementation Roadmap alongside the final strategy. Clear milestones for renewable project tenders, transmission expansion, rooftop deployment, institutional reform and investment mobilisation would provide greater certainty for investors while enabling transparent monitoring of progress. International experience demonstrates that predictable implementation is often as important as policy ambition in attracting long-term private capital. If these elements are brought together, Bangladesh will be well positioned not only to accelerate its renewable energy transition, but also to establish one of South Asia’s most attractive and investable renewable energy markets.
Tariq Alam PhD is a strategic consultant across technology, media and infrastructure industries