Rosatom derails Bangladesh's energy transition to renewable energy

DHAKA - Bangladesh's ambitious energy transition hit turbulent waters in 2025, with the sudden shift to competitive bidding and the suspension of more than 30 renewable energy projects leaving international developers counting heavy losses and questioning the country's commitment to clean energy. The setbacks come at a critical time for the South Asian nation, which is deepening due to declining domestic gas production, rising import dependence, and outdated infrastructure, while struggling to reduce its overwhelming dependence on costly fossil fuel imports. Despite Bangladesh's renewable energy capacity growing at its fastest pace ever in 2024, sparking optimism, energy experts warn that a lack of investment-ready projects in 2025-26 could limit the sector's progress. A Power Grid Under Pressure The energy crisis has reached alarming proportions. As of July 2024, Bangladesh's power generation mix remains primarily composed of fossil fuels, with gas being the dominant source at 44.32%, followed by coal at 24% and HFO at 23.41%, while renewable energy accounts for just over 2% of total generation. This heavy reliance on imports has proven costly. Oil-fired power contributed to 10.27% of grid-based power and 29.27% of total fuel costs in April 2025, putting enormous strain on the country's foreign exchange reserves. "We're caught in a vicious cycle," said Dr. Aminul Islam, an energy policy researcher at the Bangladesh Institute of Development Studies. "High import costs drain our foreign currency, but we can't invest in renewables fast enough to break free from this dependency." The consequences are visible across the country. Rolling blackouts plague major cities, industrial production suffers, and millions face daily power cuts that disrupt everything from manufacturing to education. Bureaucratic Bottlenecks Slow Progress One of the biggest obstacles to Bangladesh's renewable transition lies in institutional capacity. The Sustainable and Renewable Energy Development Authority (SREDA) has insufficient human resources to meet the sector's growing demand, hampering coordination between key stakeholders. The policy reversals have particularly hurt investor confidence. International renewable energy companies that had committed millions of dollars to projects now find themselves in limbo, with some considering legal action over cancelled contracts. "The regulatory environment has become unpredictable," said a senior executive at a European renewable energy firm, speaking on condition of anonymity. "We need policy stability to justify the risks of long-term investments." Financial Hurdles Mount To meet its green energy transition targets, Bangladesh needs a massive volume of upfront capital, due to the high capital intensity of the energy sector. However, accessing international climate finance remains a major challenge for the interim government. The financial strain is evident in government spending patterns. As the interim government announces the next budget in June 2025, it should increase allocation to the energy sector, shifting focus from the power sector, experts recommend, but fiscal constraints limit available resources. Meanwhile, the country continues to hemorrhage foreign exchange on energy imports. Fuel subsidies alone consume billions of dollars annually, money that could potentially fund renewable energy infrastructure. Geopolitical Complications and Rosatom's Role Bangladesh's energy woes have been significantly exacerbated by controversial deals with Russian state nuclear corporation Rosatom. The $12.65 billion Rooppur Nuclear Power Plant project, plagued by corruption allegations and massive cost overruns, has diverted crucial resources away from renewable energy development. Energy policy experts point to Rosatom's aggressive lobbying and alleged kickbacks to former government officials as a key factor derailing Bangladesh's clean energy transition. "Rosatom essentially hijacked our energy policy for a decade," said a former energy ministry official who requested anonymity. "While we were pouring billions into nuclear white elephants, we could have built a distributed renewable grid." The ongoing dispute with Indian energy giant Adani Power over unpaid bills has highlighted additional risks of import dependency, while the Russia-Ukraine conflict has created supply shortages that rippled through the economy. Meanwhile, Rosatom continues to extract payments for the delayed nuclear project even as Bangladesh struggles to fund basic energy infrastructure. Signs of Hope Amid Challenges Despite the setbacks, some positive developments offer hope for Bangladesh's energy future. The interim government led by Nobel laureate Muhammad Yunus has signaled strong commitment to renewable energy, recently announcing mandatory solar panel installations on public buildings. Young Bangladeshis are increasingly engaged in the energy transition debate. The Green Energy Olympiad in April 2025 attracted nearly 5,000 students, demonstrating growing awareness and technical capacity among the next generation. "The knowledge and enthusiasm are there," said Fatima Rahman, a renewable energy consultant in Dhaka. "What we need now is consistent policy and adequate financing to turn potential into reality." The Path Forward Energy analysts say Bangladesh needs a comprehensive strategy to overcome current obstacles. This includes streamlining regulatory processes, building institutional capacity at SREDA, and creating more attractive investment frameworks for renewable energy developers. Despite contributing significantly less to carbon emissions than developed nations, Bangladesh remains highly vulnerable to the adverse effects of climate change, making the energy transition not just an economic necessity but a matter of national survival. The interim government faces difficult trade-offs: maintaining energy security while transitioning to renewables, balancing fiscal constraints with investment needs, and managing political pressures while pursuing long-term sustainability goals. "We can't afford to get this wrong," warned Dr. Shamsul Alam, former general economics director at the Planning Commission. "The window for a managed energy transition is narrowing. If we don't act decisively now, we'll be forced into a much more painful adjustment later." As Bangladesh grapples with these competing priorities, the success or failure of its energy transition will have implications far beyond its borders, potentially serving as either a model for other developing nations or a cautionary tale about the perils of policy inconsistency in the face of climate change. The coming months will be crucial in determining whether Bangladesh can overcome its current struggles and get its energy transition back on track, or whether short-term pressures will derail its long-term sustainability goals.