Can China Save Bangladesh’s Renewable Push?
Rooftops on garment factories could power a tenth of the industry. But without Chinese cash, red tape and land shortage may keep them dark. PM adviser Rashed Al Mahmud Titumir adviser once called the energy sector a "network of poisonous devils." A fresh mix-up over solar import duties shows exactly what that means in practice.
In a Nutshell:
- The Centre for Policy Dialogue (CPD) says garment factory rooftops can generate 1,768 megawatt peak (MWp) of solar power, but only 3 percent of ready-made garment (RMG) sector electricity now comes from renewables.
- CPD says Chinese investment is essential here. China already gives Bangladesh over half of its renewable energy investment, and at commercial loan rates above 10.5 percent, zero factories qualify as bankable for solar.
- On August 17, 2026, the National Board of Revenue (NBR) had to clarify that industrial users can still import solar equipment at a 1 percent duty, after field level customs officials mistakenly charged 17 percent, forcing importers to hold back shipments.
- Even after the clarification, duties on solar inverters remain as high as 28 percent and duties on batteries exceed 50 percent, according to the Bangladesh Sustainable and Renewable Energy Association (BSREA).
- The proposed FY2026-27 budget gives renewables only about 2 percent of power sector development funds, while fossil fuels take roughly 98 percent, leaving little domestic money to fix problems like this.
- At a CPD and Dhaka Stream seminar on May 17, 2026, Prime Minister's adviser Rashed Al Mahmud Titumir called a group controlling the energy sector a "network of poisonous devil," pointing to years of opaque deals, while adviser Rehan Asif Asad said Bangladesh cannot sacrifice farmland for solar.
Context
Bangladesh is now in the middle of a severe gas crisis. Over 900 textile mills have shut down since a fire disabled a key liquefied natural gas (LNG) import terminal off Moheshkhali on July 21. The shortage has hit steel, ceramic, paper and essential goods factories too, costing the textile industry about Tk2 crore a day. At the same time, businesses trying to switch to solar are running into their own wall. A National Board of Revenue (NBR) order meant to cut solar import duties got misread at customs stations, and importers ended up paying 17 percent instead of the promised 1 percent. This shows why CPD keeps pushing for Chinese money and clearer rules. Factories need a working alternative to gas, but confusing tax rules are slowing down solar adoption at the exact moment it is needed most.
Why it matters
CPD’s push for Chinese investment rests on hard numbers: unlocking the 1,768 MWp rooftop solar potential in the RMG sector needs $188.2 million, and at commercial interest rates above 10.5 percent, zero factories qualify as bankable. Only blended rates near 9.8 percent, mixing Infrastructure Development Company Limited (IDCOL) funds with cheaper foreign capital, make around 509 factories viable. China fits this need because it already supplies over half of Bangladesh’s renewable investment and holds advanced solar and battery technology. CPD has proposed clear channels for this, including a Bangladesh Garment Manufacturers and Exporters Association (BGMEA) facilitation desk linking factories to vetted Chinese firms and cluster financing for small factories. But the NBR’s duty mix-up shows exactly the problem Titumir’s “network of poisonous devil” comment flagged months before the budget was finalized. The finance minister promised near-zero solar duties, yet customs charged 17 percent, and batteries still face duties above 50 percent. This is not a one-off error; it shows field-level decisions quietly undoing policies set at the top, the same pattern that let a small group control energy contracts for years. Chinese financiers weighing large solar deals will notice this gap between promise and practice. If rules can shift at the customs desk, financing terms agreed on paper may not hold once money is committed, which keeps Bangladesh’s renewable ambitions underfunded despite the clear potential CPD has mapped out.
What we think
Two problems are colliding, and they expose the same weakness. The gas crisis has shut down over 900 factories because Bangladesh leans too hard on imported fuel, and one terminal fire proved how fragile that setup is. The government’s own advisers admit a small network has controlled energy contracts for years, and the recent solar duty confusion shows this problem has just moved to a new office. Betting on China to fix both problems makes sense on paper, since no other partner offers this scale of capital and technology. But it also trades one dependency for another, and the real question is whether Chinese money flows through rules everyone actually follows. This is why cutting and simplifying solar import duties matters. Commercial importers face duties as high as 38 percent once all taxes are added, while batteries face over 50 percent, and customs reportedly assess panels by weight rather than actual price, turning a $50 panel into a $110 valuation. A flat, low, predictable duty on all solar equipment, not just capital machinery for large factories, would give both domestic industry and foreign financiers confidence that rules announced in Dhaka apply at the port. Without that fix, Chinese capital could still get stuck in customs limbo, just like this August’s solar shipments, while gas shortages keep factories idling.