United News of Bangladesh

The government has begun work on achieving five key milestones to secure Bangladesh's energy future, with a strong push toward renewable energy and reducing dependence on imports, said Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir on Sunday. Speaking at a dialogue titled "Renewable Energy in the Upcoming Budget: Expectations and Reality" organised by think tank Centre for Policy Dialogue (CPD) at a city hotel, Titumir said the country's energy sector had long been surrendered to oligarchs under import-dependent policies that left Bangladesh economically vulnerable. "The entire energy sector was handed over to oligarchs and made import-reliant. Instead of driving industrialisation, energy policies pursued in the past made Bangladesh economically dependent on others," he said. The adviser outlined five priority milestones guiding the government's energy roadmap: First, the upcoming budget will allocate greater resources toward renewable energy which he described as the sector's top priority. Second, energy pricing will be aligned with consumers' income levels.   "There are two categories of consumers: general consumers and industrialists who are investors. Among general consumers, there are three tiers: upper, middle and lower income groups. Prices will be set in accordance with each group's income, with due regard for the decisions of the regulatory commission." the adviser said. Third, a new policy framework will be developed to encourage the uptake of renewable energy, with a view to moving from import dependence toward self-sufficiency. Fourth, domestic gas exploration will resume. "Bangladesh will restart gas field exploration. Only relying on foreign agencies will not be allowed. Steps have already been taken to strengthen state-owned BAPEX to build domestic capacity," the adviser said. Fifth, minimum fuel reserves will be maintained across all energy sources. "There was never any concept of strategic reserves in this sector. The government is now paying serious attention to that," Titumir said. Titumir criticised the existing structure of the power sector, saying a large gap between installed capacity and actual utilisation was draining public resources. "Excessive capacity was retained knowing it would never be used, turning capacity charges into a serious burden." He also questioned the legal basis of several power sector contracts, saying they were not in line with the country's energy security interests. "The structural upgrades needed to transition away from fossil fuels toward a liveable, environmentally safe framework were never made, which is a grave failing of Bangladesh's power sector." On the recent rise in fuel prices, Titumir said price adjustments remained modest compared to the level of subsidies provided. "This modest adjustment alone pushed up inflation. Had diesel prices been raised earlier, it would have adversely affected agricultural production." He pushed back against calls for fully market-aligned pricing, saying a government accountable to the people cannot simply raise prices at will, particularly amid the ongoing Middle East crisis. Titumir said the current government aims to chart a new energy policy in the national interest, one that reduces foreign dependence and builds a stronger, more self-reliant energy sector for Bangladesh.    

Renewable energy (RE) accounts for only 5 percent of Bangladesh's revised development budget allocation for the power and energy sector in the current fiscal year, while fossil fuel-based infrastructure continues to absorb nearly 80 percent of the allocation, according to a new study by the Centre for Policy Dialogue (CPD). The findings were presented Sunday at a city hotel during a CPD programme titled "Renewable Energy in the Upcoming Budget: Expectations and Reality." Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir attended as chief guest. The session was moderated by CPD Research Director Khondaker Golam Moazzem, and the paper was presented by Programme Associate Md. Khalid Mahmud. The study, titled "Renewable Energy in the National Budget 2026-27: Overshadowed by Fossil Fuels?", found that renewable energy projects account for only 3 percent of the total power and energy project budget and receive a mere 5 percent of the revised FY2026 allocation, amounting to BDT 795 crore, while fossil fuel-based projects command 87 percent of the total project budget and 79 percent of actual allocation. Bangladesh has spent over BDT 1,474 billion subsidising fossil fuel-based power generation between FY2020-21 and FY2024-25, the study noted. The subsidy burden surged to BDT 620 billion in the revised FY2024-25 estimate, against an expected BDT 350-370 billion for the current year. Bangladesh provides the highest energy subsidy as a share of the sector budget, around 34 percent, among selected Asian countries, the paper said. The study also flagged that the FY2025-26 budget omitted a BDT 100 crore renewable energy allocation that had been included in the previous fiscal year, and introduced no new incentives for solar or other clean energy technologies. Bangladesh's total installed renewable energy capacity currently stands at approximately 1,745 MW, with solar photovoltaic dominating at 83 percent of the total. The share of renewables in the country's total installed capacity remains at just 5.39 percent. The compound annual growth rate of renewable capacity from 2016 to May 2026 was recorded at 15.78 percent. On the private sector front, the study noted that while 168 MW of solar projects were completed in FY2024-25, some 321 MW are currently under construction and over 5,254 MW remain in the tendering or planning phase, raising concerns about the pace of the procurement process. Bangladesh floated four tender packages for a combined 5,238 MW of renewable capacity between December 2024 and March 2025, but the rounds drew limited investor interest, requiring repeated deadline extensions. The government has also cancelled 31 letters of intent covering 3,287 MW of capacity, projects worth around USD 6 billion in foreign investment, triggering 11 High Court petitions. The CPD study identified high import duties as a key barrier, with lithium-ion batteries facing a total tax incidence of 61.80 percent and solar inverters facing 28.73 percent. It called on the National Board of Revenue (NBR) to adopt a full-chain duty waiver across the entire solar value chain rather than selective relief on individual components. Among its recommendations, the study urged the government to establish a standalone Renewable Energy Development Fund with ring-fenced allocations, create a dedicated Ministry of Renewable Energy, restructure SREDA into a statutory regulatory body with enforcement authority, and adopt a rolling three-year RE budget commitment to give investors long-term fiscal visibility. The paper also recommended a phased, legislated reduction in fossil fuel subsidies tied to verified renewable capacity additions, introduction of a direct RE promotion subsidy, and a dedicated budget allocation for the National Rooftop Solar Programme launched in July 2025. The country has an estimated rooftop solar potential exceeding 100 GWp and a gross wind energy potential of over 30 GW. To meet the government's target of generating 10,000 MW from solar by 2030, the study said Bangladesh would need to install approximately 1,662 MW annually from January 2026 onward, a pace that would require a substantially different budgetary posture than currently on offer.