Staff Reporter :
Bangladesh will need an investment of between $35.2 billion and $42.6 billion if it is to meet its renewable electricity target of 30 per cent by 2040, the Centre for Policy Dialogue (CPD) has warned.
The think tank cautioned that the country’s transition risks being undermined by policy inconsistencies, inflated electricity demand projections, and a lack of planning to phase out fossil fuels. Unless urgent reforms are introduced, Bangladesh could face both a financial crisis and the failure to achieve its climate commitments.
The findings were presented on Sunday at a CPD dialogue titled “NDC 3.0 for the Power Sector: Is Bangladesh Setting ‘Ambitious’ Targets?”
CPD research director Dr Khondaker Golam Moazzem said: “If Bangladesh continues to be policy-ambiguous and dependent on fossil fuels, the risk of financial crisis and failure to meet climate targets will increase.
On the other hand, if Bangladesh adopts a unified strategy, it can successfully transition to renewable energy. Now is the time to take decisive action.”
According to CPD’s calculations, Bangladesh’s electricity demand will rise to 29,761 megawatts (MW) by 2040, compared with 22,702 MW in 2030 and 26,277 MW in 2035. Meeting the 2040 target of 30 per cent renewables would require 8,928 MW of renewable electricity generation – equivalent to 35,713 MW of installed renewable capacity, given the low plant factor of renewable technologies.
In contrast, official government plans forecast much higher demand. The Integrated Energy and Power Master Plan (IEPMP 2023) projects 58,680 MW by 2041 with a 25 per cent reserve margin, targeting 40 per cent clean energy. However, CPD pointed out that just 9 per cent of this comes from traditional renewables, with the rest from nuclear, carbon capture, hydrogen and ammonia co-firing – a definition it argues dilutes the role of renewables.
The Mujib Climate Prosperity Plan (MCPP), meanwhile, sets targets of 30 per cent renewables by 2030 and 40 per cent by 2041, but lacks demand projections. The forthcoming Renewable Energy Policy (2025) sets 20 per cent renewables by 2030 and 30 per cent by 2040.
CPD argued its own econometric model, which takes into account GDP, population, energy prices and CO? emissions, provides a more realistic forecast and avoids the risks of stranded assets or power shortages.
Industry representatives also stressed the importance of investor confidence. Imran Karim, former president of the Bangladesh Independent Power Producers’ Association (BIPPA), noted that renewables currently account for only 2 per cent of the energy mix. Raising this to 20 per cent by 2030 would require $12-14 billion in investment, he said.
“The private sector can play a major role in this. The government has issued Letters of Intent for renewable projects, but quick tendering is essential to accelerate progress,” Karim added.
The CPD urged the government to set clearer and more ambitious renewable targets in the forthcoming Nationally Determined Contribution (NDC) 2025.
Recommendations include establishing a 30 per cent renewable target (35,753 MW) by 2040, if not 40 per cent, setting interim goals for 2035, improving coordination among government agencies, providing stronger frameworks for accurate demand forecasting and ensuring gender and youth inclusion in green energy jobs.
The think tank also stressed the need for finance and policy support to aid communities affected by both new renewable projects and the phasing out of fossil fuel plants.
