A national-level dialogue in the capital has underscored the urgency of transitioning to renewable energy for macroeconomic stability, environmental sustainability, and economic growth by addressing regulatory flaws, mobilising investments, and fostering collaboration.
South Asian Network on Economic Modeling (SANEM) organised the dialogue titled ‘Exploring a Sustainable Pathway for Bangladesh’s Energy Transformation Towards Green and Clean Energy’ at BRAC Centre Inn, in Dhaka on Saturday.
Under the project, SANEM presented the findings of three studies at this event.
The first study, titled “Macroeconomic Effects of Energy Price Fluctuations: Evidence from Bangladesh”, examined the impact of global fossil fuel energy price shocks on Bangladesh’s macroeconomy.
The study, therefore, suggested several policy recommendations such as diversification of energy sources, effective monetary policy adjustment, dynamic price adjustment mechanism, revising energy planning, strategic energy reserves, enhancing energy infrastructure, adoption of efficient technology, and attracting FDI in renewable energy projects among others.
The 2nd study titled “An Assessment of Institutional Quality and Political Economy Dynamics of the Power and Energy Sector in Light of the Renewable Energy Transition in Bangladesh”, assessed the institutional quality and political economy of Bangladesh’s power and energy sector.
It recommends Bangladesh must adopt a cohesive and transparent policy framework to drive its transition to renewable energy. Key actions include abolishing the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010, revising the IEPMP 2023 to phase out fossil fuels and inefficient power plants, and restoring the capacity of the Bangladesh Energy Regulatory Commission (BERC) through comprehensive reforms.
Eliminating high duties on renewable energy equipment, introducing performance-based subsidies, and implementing financial incentives for energy efficiency are critical to encouraging private-sector investment, it said.
Transparency in project tendering, investor selection, and the renegotiation of Independent Power Producer (IPP) contracts to include “no electricity, no pay” clauses are necessary to ensure fairness and accountability. Empowering the Sustainable and Renewable Energy Development Authority (SREDA) with adequate authority and resources, along with robust oversight mechanisms, will address policy mismatches, prevent mismanagement, and accelerate the country’s energy transition.
The third study, titled “Assessing Investment Needs for Renewable Energy Transition in Bangladesh by 2041” focused on solar and wind power development.
It recommends mobilizing the necessary investment, public-private partnerships (PPPs), green bonds, and concessional financing from international institutions like the World Bank, ADB, and GCF are recommended.
Besides, creating a dedicated renewable energy fund with blended financing-comprising grants, loans, and equity-could support small- and medium-scale renewable energy projects, it said.
