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Bangladesh’s costly solar projects derail renewable energy ambitions

Overpriced solar deals and rushed contracts left Bangladesh paying four times more for electricity than neighboring countries. Can reforms fix this broken system?

,   and  Administrator
2 min read
In the picture I can see few buildings which has few lights on it.
In the picture I can see few buildings which has few lights on it.

Bangladesh’s costly solar projects derail renewable energy ambitions

Bangladesh’s energy sector faces serious challenges after a new study exposed inefficiencies and high costs in renewable projects. The Transparency International Bangladesh (TIB) report found that early solar schemes under the Awami League government were far more expensive than necessary. These issues contributed to the country missing its renewable energy targets while burdening consumers with higher electricity prices.

The study focused on power purchase agreements signed by the Awami League before August 5, 2004. Six solar projects from that period cost an average of Tk 13.8 crore per megawatt—1.5 times higher than the standard Tk 8 crore benchmark. These early schemes relied on pricey imported equipment, rushed contracts, and short-term financing, all of which drove up expenses. As a result, the country overspent by Tk 2,926.88 crore on solar power alone.

The average electricity tariff for these projects reached $0.124 per kilowatt-hour, nearly four times higher than rates in India ($0.03), Pakistan ($0.032), and China ($0.045). Despite these high costs, renewable energy still accounts for just 4% of Bangladesh’s total installed capacity—far below the 10% target set for 2020. The interim government later scrapped the Quick Enhancement of Electricity and Energy Supply Act, 2010, after it was misused to inflate power purchase deals. Out of 42 approved renewable projects, 37 were cancelled under the new administration. In response, the TIB proposed 15 reforms, including scrapping the existing fossil fuel-heavy energy master plan. Their recommendations push for a new strategy focused on cutting fossil fuel dependence and expanding renewable energy sources.

The report highlights how early policy failures and cost overruns have set back Bangladesh’s renewable energy goals. With only 1,314.70MW of clean power in the system, the country now faces pressure to reform its energy policies. The TIB’s proposals aim to create a more transparent and sustainable sector—but implementation will determine whether future projects avoid past mistakes.

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