Dhaka eyes for G2G investment in solar energy

Staff Reporter :

Chief Adviser Professor Muhammad Yunus is preparing for a pivotal mid-August visit to Indonesia aimed at recalibrating Bangladesh’s trade and energy ties with the Southeast Asian giant.

Sources said the visit would open new frontiers in bilateral cooperation, with a spotlight on energy diversification, investment in infrastructure, and narrowing the glaring trade imbalance.

This high-profile engagement comes as Jakarta expresses keen interest in deepening its strategic and economic footprint in South Asia.

Both sides are working to finalise the date of the visit, which will mark an important step in Bangladesh’s evolving energy diplomacy.

With Middle Eastern geopolitical tensions raising concerns over fuel stability, Dhaka is eyeing Indonesia as a key partner to hedge risks.

The government is actively exploring direct government-to-government (G2G) coal imports, aiming to bypass costly inefficiencies tied to the current tender-based model.

Energy Adviser Dr. Muhammad Fouzul Kabir Khan recently told a media that G2G coal procurement from Indonesia would address issues of inflated pricing, inconsistent quality, and alleged manipulation.

Bangladesh currently imports over 3.5 million tonnes of coal from Indonesia, but through private channels. The proposed shift to G2G imports, possibly tied to joint investments in Indonesian coal mines, signals Dhaka’s intention to secure more reliable and transparent energy sources.

Meanwhile, Indonesia’s state-owned oil giant Pertamina is eyeing entry into the Bangladeshi fuel market.

Pertamina officials have already met with Bangladesh’s Energy Secretary, expressing their willingness to supply gasoline, lubricants, and marine fuels. This move could reduce Dhaka’s overdependence on Middle Eastern oil suppliers and introduce a new dimension of strategic cooperation.

Bangladesh is also targeting Indonesian investment in renewable energy, especially solar power, along with infrastructure such as Floating Storage and Regasification Units (FSRUs), gas pipelines, and mooring terminals.

Power Division sources confirmed discussions around a proposed 500MW solar power project in Maheshkhali’s Matarbari, estimated to cost around $500 million. A memorandum of understanding was signed between Bangladesh Coal Power Generation Company and PT Power on 15 July.

Further, Pertamina has submitted a bid for the operation and maintenance of the country’s Single Point Mooring terminal, which is under evaluation by the Bangladesh Petroleum Corporation (BPC).

There is also a renewed focus on the Bhola-Barishal gas pipeline, which could see Indonesian investment in the near future.

Despite strong import ties, Bangladesh faces a lopsided trade relationship with Indonesia. In FY23, Bangladesh exported goods worth only $64 million compared to imports exceeding $3.3 billion – largely palm oil, coal, and refined petroleum.

The imbalance has grown over the years, with Indonesia’s exports rising at a compound annual growth rate of 13.6% since 2018.

In preparation for the high-level visit, the Ministry of Foreign Affairs convened an inter-ministerial meeting on 7 July to streamline agendas related to trade, investment, and energy. Ministries and agencies were instructed to submit final inputs by 20 July.

The visit is being seen as a watershed moment for Bangladesh’s outreach to Southeast Asia – not just to rebalance trade but to ensure long-term energy security through diversified sourcing and cross-border investments.