Bangladesh’s energy security, economic, and environmental concerns are rising as a result of the Asian Development Bank’s (ADB) significant lending to fossil fuel-based projects. The nation’s potential for sustainable energy and electricity generation is being hindered by the bank’s lack of investment in the renewable energy sector. Experts caution that the growth of the renewable energy sector will continue to fall short of projections unless governmental obstacles are eliminated.

On Sunday (7 December), during the second day of the three-day Bangladesh Energy Conference 2025 at the Bangladesh Military Museum, Sharmin Akter Brishti, Coordinator of NGO Forum on ADB, presented a report titled “Multinational Banks in Bangladesh’s Energy Sector.” The session was chaired by the organization’s Executive Director, Ryan Hasan.

The report shows that South Asia has a total of 570 energy projects with $92.1 billion in commitments, of which Bangladesh received $17.34 billion. Among these, 36 gas-centric projects received $5.995 billion, generating a total capacity of 3,659 MW.

In Bangladesh, 60% of ADB’s gas financing comes from the Technical Assistance Special Fund, 36% from high-interest OCR loans, and only 4% from the ADF fund. While ADB worked on gas planning, system development, and power system master plans between 1977 and 1993, after 2000 it prioritized building gas-based power plants, including managing tenders for the 450 MW Sirajganj and Meghnaghat plants.

The report highlights that a large portion of ADB’s investment in Bangladesh goes to gas-related projects: $1.232 billion for power plant construction, $1.12 billion for gas pipeline development, $703.6 million for gas sector development, $660 million for planning, $600 million for power system master plans, and $1.393 billion for other gas-related projects. Public sector projects received $817 million, while $415 million went to private projects like GEE, Pendecker, Summit, Zera-Reliance, and NDWPGL.

Due to gas shortages and pipeline infrastructure gaps, the Rupsha 800 MW and Reliance Meghnaghat 715 MW plants have been completed but remain non-operational, forcing Bangladesh to pay high-capacity charges under OCR loans without generating electricity. Ryan Hasan commented, “These plants are the most expensive example of energy insecurity power plants ready but no fuel available.”

According to PPAs and EIAs, the five ADB-supported plants emit 174.71 million tons of CO₂ over their lifecycle and occupy more than 160 acres along the Meghna, Meghnaghat, and Bhairab rivers, displacing local populations and causing long-term social harm.

Despite the potential of renewable energy, policy barriers and apathy have limited sector expansion. Anwar Hossain, Executive Director of Arther, said industrial rooftop solar installations receive more attention than residential rooftop systems. However, 90% of residential rooftop solar systems are ineffective, installed mainly to comply with regulations rather than to generate electricity.

Mustafa Al Mahmud, President of Bangladesh Solar and Renewable Energy Association, stressed that strong financial incentives are needed to make the economic transformation through renewable energy successful, as solar energy has high upfront costs. Invisible barriers within the system further hinder progress. While some policy initiatives exist, effective implementation is lacking.

ADB’s investment in solar energy in Bangladesh totals $118 million, with a total capacity of 225.8 MW, while investment in wind energy is zero. In its 2021 Energy Policy, ADB introduced four amendments: lifting the nuclear financing ban, supporting critical mineral supply chains, approving carbon capture technology, and financing measures to reduce methane leakage and flaring in oil and gas.

Experts warn that these amendments push financing toward high-cost, high-risk technologies, at a time when South Asia urgently needs low-cost, clean, and rapidly deployable energy.

Experts recommend removing barriers in the renewable energy sector, implementing effective policies, and increasing financial support to protect Bangladesh from the risks of gas-based projects. Failure to do so could threaten the country’s energy security, economic stability, and environmental sustainability.