Civil society groups and energy experts urged tax reforms, subsidies and a Tk 25,000 crore fund to boost renewable energy, strengthen energy security and reduce Bangladesh’s dependence on imported fossil fuels.
Civil society organizations and energy experts on Saturday (June 6) called for sweeping budgetary reforms to accelerate Bangladesh’s renewable energy transition, including reducing taxes on renewable energy equipment to a symbolic 1% and creating a Tk 25,000 crore revolving fund to support clean energy projects.
Speaking at a press conference titled “Renewable Energy for Energy Security: Policy Shifts Needed in the National Budget” at Green Lounge in Dhaka, participants warned that Bangladesh risks becoming increasingly vulnerable to expensive fuel imports, rising electricity prices and economic instability unless policymakers make renewable energy a national priority.
The event was jointly organized by the Coastal Livelihood and Environmental Action Network (CLEAN) and the Bangladesh Working Group on Ecology and Development (BWGED). Co-organizers included the Bangladesh Environmental Lawyers Association (BELA), Ethical Trading Initiative Bangladesh, Lawyers for Energy, Environment and Development (LEED) and Manusher Jonno Foundation.
Speakers said Bangladesh possesses substantial renewable energy resources but continues to face policy and financial barriers that have slowed investment and deployment.
According to information presented at the event, the country’s installed renewable energy capacity, including hydropower, currently stands at 1,679 megawatts, significantly below national targets. At the same time, Bangladesh has an estimated combined solar and wind energy potential of 132,000 megawatts.
Despite this potential, renewable energy equipment remains subject to taxes and duties ranging from 27% to 61%, making clean energy systems more expensive for consumers and businesses. Participants argued that fossil fuel-based power generation continues to receive direct and indirect policy support, creating an uneven playing field for renewable technologies.
They said these tax structures discourage households, farmers and small entrepreneurs from investing in solar energy. Renewable energy-related taxes contribute less than 0.05% of total government revenue, making the policy both economically inefficient and environmentally harmful, they added.
The speakers noted that every megawatt of solar power can save approximately Tk 31.1 million annually in fuel import costs while preventing around 1,180 tonnes of carbon dioxide emissions.
The conference presented several recommendations for inclusion in the upcoming national budget.
Among the proposals was a call to reduce all duties, value-added tax and other taxes on renewable energy equipment to a symbolic 1% for the next decade.
Participants also urged the government to establish a Tk 25,000 crore revolving fund under Bangladesh Bank to provide low-interest financing, below 5%, for renewable energy projects.
They recommended introducing a subsidy of at least Tk 25,000 per kilowatt for residential rooftop solar systems, with an additional 10% support package for women-led initiatives and projects involving indigenous communities.
Other proposals included mandating a minimum 20% Battery Energy Storage System (BESS) component in new utility-scale renewable energy projects, activating corporate power purchase agreements (CPPA) and introducing a progressive carbon emission tax.
The conference also called for large-scale youth training programmes under relevant government agencies with the goal of generating 10 million green jobs annually.
Speakers further advocated prioritizing rooftop solar, agrivoltaic systems and floating solar projects instead of large land-intensive fossil fuel and utility-scale developments to protect agricultural land and expand decentralized energy access.
CLEAN Chief Executive Hasan Mehedi said continued dependence on imported fossil fuels would deepen economic challenges.
“Without immediate policy reform, Bangladesh risks remaining trapped in rising energy costs, import dependency and long-term economic uncertainty. Renewable energy must be prioritized in the upcoming budget through tax reform, financial incentives and strategic policy support,” he said.
Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association (BSREA), emphasized the importance of reliable electricity for economic development.
“Without uninterrupted electricity, industrialization is impossible, and without industrialization, unemployment cannot be reduced. Renewable energy investment is the most effective path to energy security, industrial growth and job creation,” he said.
Advocate Shimonuzzaman, research director at LEED, said the gap between renewable energy targets and actual investment remained substantial.
“Without strong fiscal and policy support, the energy transition will not be achievable,” he said.
Munir Uddin Shamim, director of ETI Bangladesh, stressed the strategic significance of reducing dependence on imported energy.
“Energy sovereignty is now inseparable from national sovereignty. The upcoming national budget must reflect election commitments by prioritizing renewable energy expansion,” he said.
Concept notes at the event were presented by CLEAN Networking Advisor Monowar Mostafa. Other speakers included Kaniz Rabeya of CLEAN and Bonshree Mitra Niyogi of Manusher Jonno Foundation.
The organizations said Bangladesh’s energy challenges stem not from a lack of resources but from policy imbalances and misplaced financial priorities.
They warned that continuing fossil fuel subsidies while providing insufficient support for renewable energy would increase power generation costs, place additional pressure on foreign exchange reserves and leave the country more exposed to volatility in global fuel markets.
Such an approach would weaken industrial competitiveness and undermine Bangladesh’s climate commitments, they said, making the energy system more expensive, less resilient and increasingly unsustainable over the long term.
Conversely, expanding domestic renewable energy generation could reduce import dependence, strengthen the economy, create employment opportunities and improve the country’s resilience to climate-related risks, the speakers added.
