Bangladesh can significantly reduce electricity costs, strengthen energy security, improve public finances, and create thousands of new jobs by accelerating its clean energy transition, according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).
The report, “Driving the Energy Transition: Debunking Climate Mitigation Myths,” argues that renewable energy and energy efficiency offer substantial economic and financial benefits beyond climate action. While Bangladesh’s per capita carbon emissions stood at just 1.48 tonnes of CO2 equivalent in 2022, well below the global average of 6.48 tonnes, the country remains heavily exposed to imported fossil fuel price volatility, foreign exchange pressures, and geopolitical risks.
IEEFA highlighted the growing financial burden of Bangladesh’s fossil fuel-dependent power sector. The sector accounted for nearly 7 percent of the national budget after recording a revenue deficit of BDT 556.6 billion ($4.53 billion) in fiscal year 2024-25, compared with the country’s total budget of BDT 7,970 billion ($65.1 billion). The report warns that continued reliance on imported fuels increases exposure to price shocks, supply disruptions, and currency risks.
Rising electricity tariffs are further strengthening the business case for renewable energy. Bangladesh recently raised retail electricity prices by up to 17 percent, with industrial tariffs increasing from BDT 9.75-13.62 per kWh to BDT 11.56-16.06 per kWh. According to IEEFA, higher power prices are making rooftop solar and utility-scale solar projects increasingly attractive for businesses seeking lower operating costs and greater energy reliability.
The report identifies energy efficiency as one of the most cost-effective strategies available to Bangladesh. Energy-saving measures can reduce consumption, lower operating expenses, and avoid costly investments in new generation and transmission infrastructure while improving energy security and industrial competitiveness, Shafiqul Alam, IEEFA’s Lead Analyst, Energy, for Bangladesh, said.
IEEFA also challenges concerns that renewable energy is too expensive. It notes that fuel shortages have delayed projects such as the 800 MW Rupsha combined-cycle gas power plant, while several gas-fired facilities continue operating below capacity. The report suggests that solar power paired with battery energy storage systems can provide electricity during peak demand periods at lower costs than private furnace oil-fired plants, which generated power at an average cost of BDT 27.5 per kWh ($0.22 per kWh) during fiscal year 2024-25.
The study says the clean energy transition can become a major source of employment. Growing demand is expected for solar installers, energy auditors, engineers, project managers, sustainable finance specialists, technical experts, and energy service company (ESCO) professionals. A broader ESCO ecosystem could generate jobs across project design, financing, implementation, monitoring, and maintenance.
Bangladesh’s telecom sector is already demonstrating the commercial benefits of renewable energy. Grameenphone consumed 564.86 GWh of electricity in 2025, with 190 GWh, or 33.64 percent, sourced from renewable electricity. The company generated an additional 6.02 GWh through on-site solar systems, bringing total renewable energy consumption to 196.02 GWh. Grameenphone has deployed around 1,200 solar-powered telecom sites and targets a 50 percent reduction in Scope 1 and Scope 2 emissions by 2030 compared with 2019 levels.
Banglalink is also expanding renewable energy investments. The operator commissioned an 80-kilowatt solar system at its Gazipur data center, expected to generate 0.13 GWh annually, reduce carbon emissions by 60 tonnes per year, and save approximately $12,600 in annual energy costs. Banglalink has additionally partnered with FloSolar Solutions on a 100 MW solar power project designed to supply renewable electricity to more than 15,000 telecom sites, network facilities, and data centers. The company aims to source about 60 percent of its electricity from renewable energy.
Robi Axiata continues to modernize its network with energy-efficient technologies as part of its sustainability strategy, reducing power consumption across operations.
Solar energy investments are also gaining momentum across Bangladesh. Infrastructure Development Company Limited (IDCOL) has financed more than 6 million solar home systems, one of the world’s largest off-grid solar programs. Major energy companies including Summit Group are expanding their renewable energy portfolios, while developers such as Joules Power and Solarland are advancing utility-scale solar projects.
Bangladesh’s total installed solar capacity has now exceeded 1 GW, including utility-scale plants, rooftop solar systems, solar irrigation projects, and off-grid solar home systems. Hundreds of megawatts of additional solar capacity are under development as the country seeks to reduce dependence on imported liquefied natural gas, coal, and oil.
IEEFA concludes that energy transition should be viewed as an economic and energy security strategy rather than solely a climate initiative. The report states that accelerating investments in solar power, battery storage, energy efficiency, and grid modernization can reduce fuel import dependence, lower subsidy requirements, improve balance-of-payments stability, protect consumers from global energy market volatility, and support long-term economic growth in Bangladesh.
FASNA SHABEER
