The Asian Development Bank plans to channel several hundred million dollars into Bangladesh’s plan to expand solar power generation. Policy-based lending by the ADB is expected to funnel money into the government’s ambitious recipe to heal electricity crises by enhancing solar-power generation, officials said. A team led by ADB Director of the South Asia Energy Team Sujata Gupta met with officials from the Finance Division, Power Division, Sustainable and Renewable Energy Development Authority (SREDA), Bangladesh Energy Regulatory Commission (BERC), and Bangladesh Power Development Board (BPDB) over three days ending Thursday.
Government seeks billions for rooftop solar
The Power Division previously asked the ADB for support through policy-based lending to accelerate renewable-energy development. They want to reduce reliance on fossil fuels and promote clean electricity generation. Officials noted that the request also aims to reduce power-sector subsidies and strengthen sector sustainability. The government wants to secure $2.0 billion from the ADB to materialize its rooftop solar power ambition. The Finance Division subsequently asked the Economic Relations Division to place the proposal to the ADB for getting the loan as soon as possible.
Officials met with an ADB delegation to align on national energy goals, focusing on how regulatory and policy changes can speed up renewable energy projects. They analyzed current policies to spot obstacles preventing larger investments, particularly from private companies. The discussions also covered specific reforms that could qualify for funding under the proposed ADB loan package. Early in the talks, ADB representatives suggested allocating $100 million immediately and potentially adding more to unlock hundreds of millions in total for renewable initiatives.
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The exact loan amount and approval timeline will be determined after further discussions with senior officials from the Economic Relations Division. In return for the funding, Bangladesh must implement reforms to improve financial stability, expand its energy infrastructure, and better integrate renewable sources into the national grid. Recently, the government has introduced new rules and incentives to boost rooftop solar installations, aiming to produce an extra 3,000 to 4,000 megawatts from this source by next summer to prevent energy shortages.
A Tk 15-billion fund has been created by repurposing Tk 10 billion from the budgetary allocation for the Small and Medium Enterprise (SME) sector and Tk 5.0 billion from operating loans. The government diverted necessary funds from the development budget after private-sector renewable-energy producers suggested the creation of funds for financing rooftop solar-power generation. President of Bangladesh Sustainable and Renewable Energy Association (BSREA) Mostafa Al Mahmud told The Financial Express a large sum of financial support is necessary to materialise the government’s target. “Foreign funds can be a good option for the government since many multilateral development partners provide low-cost funds for clean energy generation,” he said. The ADB focuses on supporting clean energy initiatives across Asia and the Pacific.
