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STAR BUSINESS REPORT

Bangladesh has fallen into an “energy trap” where heavy dependence on fuel imports, costing nearly $12 billion annually, has left the country vulnerable to global shocks, business leaders and energy experts warned yesterday.

Renewable energy could have offered a way out, but more than a decade of delays in shifting from fossil fuels to renewables have left the country far behind its own targets, they said at a roundtable discussion on the future of energy in the country.

Bangladesh Chamber of Industries (BCI) organised the event at its conference room at Tejgaon, Dhaka.

“Bangladesh is no longer facing just an energy crisis; it is now caught in an energy trap that threatens the country’s medium-term economic potential,” Hossain Zillur Rahman, executive chairman of Power and Participation Research Centre (PPRC), said at the event.

Discussion on the issue must move beyond isolated expert opinions and integrate the experiences of the private sector, which is bearing the brunt of the uncertainty, he said.

Rahman said unpredictability, not cost alone, had become the biggest burden on businesses.

“Even a high but predictable cost can be managed. But uncertainty makes planning impossible,” he said, calling for a coordinated transition strategy.

Noting that Bangladesh’s import-dependent energy structure poses a risk to national sovereignty, he called for a diversified solution comprising renewables, coal, regional cooperation, and stronger refining capacity.

He said transitioning into renewable energy could be a “game-changing” national agenda and urged policymakers to focus on practical, politically viable solutions.

Over 52 percent of Bangladesh’s primary energy now comes from imports, up sharply from four years ago, said Shafiqul Alam, lead analyst at the Institute of Energy Economics and Financial Analysis (IEEFA).

The growing dependence on imported fossil fuels has become one of the country’s biggest economic vulnerabilities, as it exposes the economy to global shocks and forces the government to spend nearly $12 billion annually on fuel imports.

With global fuel prices rising, the country may need to spend an additional $2.2 billion to maintain current supply levels, said Anwar-ul-Alam Chowdhury Parvez, president of BCI.

The country also faces a daily electricity shortfall of 1,500 to 2,000 megawatts, he added.

The costs are being felt most acutely by smaller businesses. Many rural factories go without electricity for 10 to 12 hours a day. “Small entrepreneurs who invested in these factories are struggling to survive,” Parvez said.

David Hasanat, president of the Bangladesh Independent Power Producers’ Association (BIPPA), said the risks had been visible for over a decade.

“The country knew about the looming risks more than a decade ago but failed to act decisively on renewable energy and efficiency measures,” he said.

Slow policy support, financing barriers, land shortages, and weak implementation had since compounded the problem, leaving industries exposed to rising costs, power instability, and mounting carbon-related trade barriers, he added.

The renewable transition, the most direct route out of the trap, remains stalled. Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association, rejected the argument that a lack of land was to blame for this.

“Our energy transition is being delayed by false narratives, not by a lack of land,” he said.

He called on the government to offer five-year tax exemptions on solar equipment and batteries, ensure access to green finance, and guarantee land and grid support.

Siddique Zobair, adviser to GreenTech Foundation Bangladesh, said Bangladesh remained far behind the renewable energy targets it set in 2008.

Delays in land allocation, weak financing, and the absence of sovereign guarantees continue to deter private investment, he said.