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China the ‘biggest player’ in Bangladesh’s energy transition

Bangladesh needs USD 80-100 billion to meet its renewable energy pledge. With a new energy master plan in the works, the government is looking abroad for finance, with China key.

Ahead of the UN climate summit in Glasgow last year, Bangladesh pledged to produce 40 per cent of its electricity from renewables by 2041. To meet this target, the country is shifting investments away from coal, oil and gas. The role of Chinese investments in Bangladesh in driving this transition will be key, experts have told The Third Pole.

The energy sector currently accounts for about 55 per cent of Bangladesh’s greenhouse gas emissions, followed by agriculture, forest and land use, waste and industrial processes. By 2030, the UN expects energy to account for more than 76 per cent of Bangladesh’s emissions. 

Nasrul Hamid, minister for power, energy and mineral resources, told The Third Pole: “To produce 40 per cent of [electricity] from renewable sources, we need huge investment. We need USD 80 to 100 billion [between 2030 and 2050]. We have started negotiating with China, Japan, the Asian Development Bank and the World Bank.”

Siddique Zobayer, a sustainable energy expert at the Asian Development Bank, told The Third Pole: “China, currently Bangladesh’s largest trading partner, is investing in most of the renewable projects.”

New master plan to put Bangladesh on a clean energy path

To put Bangladesh on the path to a low-carbon future while ensuring energy security, Hamid said, the government is finalising an Integrated Energy-Power Sector Master Plan (IEPSMP) to replace its Power Sector Master Plan (PSMP). The government aims to finalise the plan by the end of this year, according to an official at the energy ministry who spoke on condition of anonymity.

Bangladesh currently has an installed power generation capacity of 22,482 MW. Gas accounts for 51 per cent of this, followed by heavy fuel oil (28 per cent), coal (8 per cent), and high-speed diesel (6 per cent). Hydropower and solar account for only 1 per cent each.