The recent warning by Han Kun, President of the Chinese Enterprises Association in Bangladesh, at the 3rd Bangladesh-China Renewable Energy Forum, must not be taken lightly. As per a report published in this newspaper on Tuesday, his remarks highlight a growing unease among foreign investors in Bangladesh’s power sector, particularly in response to the government’s abrupt decision to renegotiate tariffs for several power projects already at advanced stages.
Renegotiating power purchase agreements (PPAs) after contracts have been signed and investments made sends a dangerous signal that the investment climate in Bangladesh is unpredictable and insecure. Investors operate on long-term forecasts and fixed returns; any disruption in the agreed terms threatens not only the financial viability of ongoing projects but also deters future investment in critical infrastructure.
Notably, major projects such as the Patuakhali 1320 MW plant, the Barishal coal plant, and the SS Power Plant are reportedly affected. According to Han, such moves are not only disruptive but amount to what he called “a disaster for investors.” Equally concerning are reports of arbitrary financial deductions and delays in payments to completed projects, including a staggering $200 million owed to the SS Power Plant.
Bangladesh’s ambitious targets — to achieve 20 per cent renewable energy by 2030 and 30 per cent by 2040 — appear increasingly unrealistic unless investor confidence is restored. Currently, grid-connected renewables contribute just 3 per cent of total energy output. Without a predictable policy environment, private sector participation in the energy transition will remain sluggish.
Findings presented by the Centre for Policy Dialogue (CPD) further reinforce the structural weaknesses deterring investors: bureaucratic inefficiencies, complex land acquisition procedures, and poor digital integration. These hurdles are compounded by the absence of vital legal protections in PPAs, such as termination clauses and payment guarantees.
The experience of countries like China, India, and Brazil demonstrates the importance of stable tariffs, transparent procurement, and state-supported infrastructure for attracting investment in renewables. Bangladesh must urgently learn from these examples.
If the government is serious about transforming its energy landscape and attracting foreign capital, it must commit to honouring existing contracts, ensure legal safeguards in new agreements, and simplify its regulatory framework. Investor trust, once broken, is difficult to rebuild. Bangladesh’s energy future — and its broader economic prospects — depend on getting this right.
