As the temporary government’s tenure concludes, authority is poised to shift to the democratically elected leadership. While the outgoing administration addressed some contentious issues in the energy sector, the new government will be tasked with implementing long-term reforms. A critical challenge for the incoming officials will be establishing durable renewable energy institutions on the foundation of previous authoritarian practices and hasty solutions from the interim period. This presents an opportunity to establish a well-structured framework for sustainable, renewable power generation.
A significant move by the interim government was the repeal of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010, also known as the “Quick Rental” act. This legislation, in effect for over a decade, facilitated questionable power agreements by sidestepping competitive bidding and standard scrutiny processes. Its abolition eliminated a key legal safeguard for politically affiliated contracts.
During the interim phase, attention was drawn to the trend of setting ambitious renewable energy targets without the requisite institutional capacity to achieve them. Bangladesh had aimed for a 10 percent renewable electricity share by 2020, with a subsequent target of 40 percent clean energy by 2041. However, by 2025, renewables only comprised approximately 4-5 percent of the total installed capacity, indicating a significant implementation gap despite the verbal commitments.
Furthermore, the interim government terminated 31 pending renewable energy projects that had been approved under the Quick Rental Act. These projects, primarily unsolicited solar ventures, represented a potential investment of $6 billion. Energy adviser Muhammad Fouzul Kabir Khan contended that many of these contracts featured exorbitant tariffs and unjustified capacity payments.
Nevertheless, Transparency International Bangladesh (TIB) cautioned that merely scrapping projects constituted a legal cleanup rather than a comprehensive energy strategy. Additionally, this action raised concerns among foreign investors, signaling unpredictability in decision-making processes. TIB emphasized the necessity of robust institutions to ensure integrity and predictability, underscoring that anti-corruption efforts, without proper regulations and foresight, could inadvertently breed uncertainty.
Bangladesh’s limited progress in adopting renewable energy is attributed to persistent institutional and policy challenges. Regulatory complexities surrounding renewable energy projects have been a key obstacle. Although the recently crafted Renewable Energy Policy, 2025, entrusts the Sustainable and Renewable Energy Development Authority (Sreda) with extensive responsibilities for promoting and overseeing renewables, licensing and approval authorities are fragmented across various agencies.
For instance, the Bangladesh Energy Regulatory Commission (BERC) now serves as the licensing body for large-scale renewable initiatives, introducing overlaps and bureaucratic intricacies. Sreda was envisioned as a centralized entity for green energy initiatives, but its jurisdiction is hindered by bureaucratic hurdles. Despite the interim government’s efforts to restore some independence to BERC in August 2024 by rescinding executive pricing powers, the commission continues to struggle in reasserting its credibility.
Additionally, Bangladesh has devised multiple energy strategies and targets that often conflict with each other. While the Mujib Climate Prosperity Plan aimed for a 30 percent renewable energy share by 2030, the Integrated Energy and Power Master Plan (IEPMP) proposed a 40 percent clean energy share by 2040, mostly relying on imports, nuclear, and large hydro projects, with minimal contribution from domestic renewables. Concurrently, approvals for new fossil fuel endeavors, such as coal and LNG-based plants, persist.
This lack of alignment highlights the insufficient prioritization of the renewable energy transition in national planning efforts. The Centre for Policy Dialogue (CPD) warned that without halting new fossil fuel ventures, the power grid could become oversaturated with conventional energy sources, impeding the expansion of renewables.
Land acquisition hurdles, prolonged approval processes for environmental clearances, and insufficient infrastructure readiness within the national power grid also impede renewable energy progress. Existing challenges, such as the absence of a modern smart grid, limited transmission capacity, and weak distribution infrastructure, discourage initiatives like rooftop solar installations and wind farms. These factors contribute to the trend of canceling more renewable energy projects than commissioning them in Bangladesh.
The incoming government will inherit an energy sector that has addressed malpractices but lacks a definitive construction strategy. Although repealing the Quick Rental Act closed a significant legal loophole, regulatory adjustments alone are insufficient to drive energy production. The primary challenge lies in transforming this reset into reliable, financially viable renewable projects.
To achieve this, reforms must be institutionalized to prevent reverting to emergency procurement laws, which could undermine investor confidence. Transparency and competitive bidding principles must be ingrained in the Renewable Energy Policy, 2025, with provisions for mandatory disclosure of power purchase agreements to ensure transparency.
Clarifying institutional roles is paramount, necessitating a clear division of responsibilities between Sreda, Bangladesh Power Development Board (BPDB), and BERC. Sreda should be empowered to coordinate renewable energy planning and project pipelines, while streamlining licensing processes to minimize overlaps. BERC must retain autonomy in tariff-setting and licensing to prevent arbitrary political interventions.
