Few countries illustrate the challenges and opportunities of Just Transition as clearly as Bangladesh.
on one hand, Bangladesh is one of the most climatevulnerable nations in the world, as per the World Risk Index, ninth for Climate disaster risk (2023).
almost one-fifth of its land lies less than one meter above sea level.
each year, millions face the threat of cyclones, floods, saline water intrusion, and drought. So, climate change is not a distant worry for Bangladesh; it is already shaping daily life, from migration to food production.
on the other hand, Bangladesh has minimal fossil resources.
apart from natural gas and a small amount of coal, the country has little of its own.
ironically, despite this scarcity, Bangladesh has built an energy system that is heavily fossil-dependent.
imported oil, coal, and LNG play a major role in power generation.
this has made the country vulnerable to price shocks and created a huge fiscal burden from subsidies. There is another side to this story. Bangladesh has enormous renewable energy potential.
the country’s location gives it abundant sunshine for solar rooftops and utility-scale solar parks.
its coastal winds can power turbines. Biogas from agriculture, livestock, and waste-to-energy can be another untapped resource.
if developed properly, these resources could provide a reliable, affordable, and clean energy for Bangladesh.
the irony is that Bangladesh has very little fossil fuel, yet its power sector depends heavily on imported fossil fuels.
at the same time, it has enormous renewable energy potential, but very little of it is being used.
the challenge is how to move from an import-dependent fossil system to a home-grown renewable energy, while making sure workers and communities are not left behind, protecting agricultural land and food security, the environment, and climate change.
a Climate-Exposed, Fossil-FuelDependent Economy Bangladesh’s energy transition begins from a place of deep contradiction. According to the Bangladesh Power Development Board (BPDB), the country’s total installed generation capacity stood at 31,505 MW (with captive) as of August 2025 (BPDB). Peak demand recorded 16,794 MW, exposing the inefficiencies of an overbuilt and underutilized power system. What’s more concerning is how this capacity is powered. Despite having minimal coal or oil reserves, Bangladesh relies on imported LNG, furnace oil, and coal for more than half of its electricity generation. From FY2019-20 to FY2023-24, the BPDB received a cumulative subsidy of US$10.64 billion (IEEFA), much of it directed toward covering the rising costs of fossil fuels in the global market.
this reliance makes Bangladesh highly vulnerable to external shocks, as seen in the energy crisis following the Ukraine war. Within just two months of the conflict, the country’s most successful sector, touted by the last regime, fell into rolling blackouts, fiscal stress, and mounting pressure on foreigncurrency reserves, proving that the power sector is truly fragile and unsustainable. Unfortunately, the country did not learn from this shock or take meaningful actions to make it sustainable. Renewables: High Potential, Low Penetration Bangladesh enjoys high solar irradiance, ranging from 4.5 to 5.5 kWh/m²/day, ideal for solar power generation.
the Sustainable and Renewable Energy Development Authority (SREDA) estimates that the country has a solar potential of 50,000 MW and significant wind potential in coastal regions.
in Bangladesh, renewable energy makes up only about 5% of the total installed capacity.
in contrast, Sri Lanka, India, and Pakistan have achieved 63%, 48%, and 47% respectively (IEEFA).
unfortunately, Bangladesh has also failed to learn from the energy transition experiences of its neighboring countries.
this disparity isn’t due to a lack of potential. Rather, it reflects a combination of policy delays and a persistent bias toward fossil fuel expansion. Policy Aspirations and Uncertainty There is a clear inconsistency in Bangladesh’s energy policies.
the Renewable Energy Policy of 2008 set a target of achieving 10% renewable energy by 2020, a goal that was not met.
one of the main reasons was the influence of the Power System Master Plans (PSMP) of 2010 and 2016, which prioritized fossil fuel-based development, especially coal and LNG.
in contrast, the Bangladesh Climate Prosperity Plan (BCPP) has set a target of 30% renewable energy by 2030 and 40% by 2040. Similarly, the Integrated Energy and Power Master Plan (IEPMP) 2023 has set a target of 40% clean energy, including hydrogen and nuclear by 2041, which directly contradicts the goals of a just energy transition and prioritizing renewable energy. Since the interim government came to power, some policy changes have been observed. Notable among these are the repeal of the controversial Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010, the reinstatement of Section 34(Ka) of the Bangladesh Energy Regulatory Commission Act, the adoption of the Renewable Energy Policy 2025, and the launch of the National Rooftop Solar Program 2025.
the Renewable Energy Policy 2025 sets targets of 20% renewable energy by 2030 and 30% by 2040, while the National Rooftop Solar Program aims to generate 3,000 MW of rooftop solar power by 2025.
it shows that energy policies and plans highlight a persistent lack of coordination and coherence.
one of the main reasons for this inconsistency is the absence of a comprehensive national policy or guiding framework for developing the energy and power sectors. While civil society has already drafted the Bangladesh National Energy Transition Policy 2024 and continues to advocate for its adoption, no visible positive initiatives have yet been taken by the government. Despite policy inconsistencies, there are several notable obstacles to scaling up renewable energy in Bangladesh. Land and Food Security Bangladesh is a land-scarce country with a dense population and ongoing food security challenges. Since arable land is at a premium, large-scale solar projects can often conflict with agriculture.
a typical solar farm requires 3-5 acres of land per MW, raising serious concerns about food security and rural livelihoods. Grid Infrastructure and Storage Bangladesh’s national grid is designed for centralized, fossil-fueled power, not decentralized, variable renewables. Lack of smart grid infrastructure, energy storage, and grid balancing mechanisms restricts the ability to absorb renewable power. Financing and Investment Gaps Bangladesh needs nearly US$1.0 billion annually until 2030 to meet its new renewable energy targets, with investments ramping up to US$1.371.46 billion annually by 2040.
this funding is necessary to achieve the goal of generating 20% of electricity from renewable sources by 2030 and 30% by 2040 (IEEFA).
one of the biggest obstacles to renewable energy expansion in Bangladesh is the persistence of high fossil fuel subsidies. Capacity payments to idle plants and fuel subsidies continue to consume a large share of public resources, leaving very little fiscal space for investment in renewables.
alongside this, investors face significant perceived risks. Currency instability, frequent regulatory changes, and the lack of reliable guarantees discourage many foreign investors from committing long-term capital. Domestic finance is also constrained. Local banks typically operate with shortterm lending horizons, which are not well-suited for renewable energy projects that require financing over 15 to 20 years. On top of this, the country struggles with a weak project pipeline.
there are too few bankable projects ready for financing, partly due to the lack of feasibility studiesand unresolved issues around land or rooftop access.
opportunities: Building a PeopleCentered Renewable Economy In Bangladesh, around 56% of total electricity generation is consumed by households, while industry accounts for 28%, commercial for 11%, and other sectors for the remaining 5%.
a significant share of residential consumers live in villages, where there is strong potential to expand renewable energy, particularly solar power, by making use of the densely populated rural villages.
this, however, requires innovative approaches and targeted initiatives.
at the same time, there is considerable scope for expanding rooftop solar systems in industries and commercial establishments, including educational institutions and government offices. The National Rooftop Solar Program is, therefore, a timely and strategic step in the right direction. Moreover, a well-planned energy transition offers multiple opportunities for Bangladesh, from strengthening energy security and reducing import dependence to creating new jobs, improving air quality, and supporting climate resilience.
a shift to renewable energy could open up wide-ranging opportunities for Bangladesh.
the solar and wind sectors alone have the potential to create tens of thousands of skilled jobs in installation, operations, and maintenance that are urgently needed for the country’s growing workforce.
off-grid solar solutions can bring electricity to remote villages still beyond the reach of the national grid, improving livelihoods and enabling new forms of economic activity.
over time, the expansion of renewables can also reduce Bangladesh’s exposure to volatile global fuel prices, saving billions in foreign exchange that is currently spent on energy imports.
equally important, renewable energy strengthens resilience. Decentralized and distributed systems, such as rooftop solar or community-based mini-grids, are less vulnerable to disruption and can continue providing power during floods, cyclones, or other disasters, an essential consideration for one of the world’s most climate-vulnerable countries.
a just transition can also empower communities in practical ways. Solar irrigation reduces reliance on costly diesel in agriculture, while biogas and clean cookstoves not only lower emissions but also improve rural health outcomes.
these examples show that the benefits of an energy transition are not confined to economics; they extend to social development, environmental sustainability, and community wellbeing. Bangladesh at COP30: Championing Climate Justice As the world heads toward COP30 in Belém, Brazil, in November 2025, Bangladesh has an important role to play in advancing the Just Transition Work Program adopted at COP28. For a country highly vulnerable to climate change and heavily dependent on imported fossil fuels, COP30 is not just another global summit; it is an opportunity to push for a fairer international system that supports a people-centered energy transition.
one of the most urgent needs for Bangladesh is a financial system that truly works. Climate finance must move beyond lofty pledges and debt-heavy loans. What Bangladesh requires is predictable, grantbased funding that can directly support renewable energy expansion and protect fiscal stability. Without such finance, ambitious energy targets risk remaining out of reach.
technology access is another critical priority. Renewable solutions such as battery storage and advanced grid software remain costly and often locked behind patents. For countries like Bangladesh, COP30 should be a platform to demand open-source innovation, technology transfer, and stronger South-South cooperation to make clean technologies affordable and scalable.
equally important is the global recognition of vulnerability. Bangladesh should press for adaptation and resilience financing under the Loss and Damage Fund, ensuring that energy security and equity are addressed alongside climate risks. The country’s experience with cyclones, flooding, and rising sea level and salinity makes clear that resilience is not optional; it is central to a just transition. Finally, the way we measure success must evolve.
a just transition cannot be judged only by reductions in CO2. For Bangladesh, the true test will be whether jobs are created, inequality is reduced, and communities and the environment are protected. Metrics must reflect these broader dimensions of justice, not just emissions figures.
in short, COP30 presents Bangladesh with an opportunity to push for finance, technology, recognition, and justice-pillars that can make the Just Transition Work Program meaningful for those who need it most. Finally, Bangladesh stands at a crossroads, highly vulnerable to climate change yet rich in renewable potential. To secure a just and sustainable future, it must align its policies, mobilize finance, and embrace people-centered solutions. COP30 offers a critical opportunity for Bangladesh to champion climate justice and turn ambition into action