Bangladesh’s renewable energy sector faces a significant funding shortfall, with only 3.6% of the required funds allocated in 2023, far below the Tk 20,500 crore needed to achieve the target of 40% energy from renewables by 2040. Banks and non-banking financial institutions (NBFIs) financed Tk 742 crore for renewable projects in 2023, a 62% increase from 2021, but this amount represents a small fraction of the total need. By 2041, the required funding is projected to reach Tk 49,400 crore, but domestic financial institutions are expected to contribute only 4-9%, risking the nation’s renewable energy goals. The study also noted that less than 1% of term loans go to renewable energy, with only 0.3% of total disbursed term loans allocated to this sector. Policy challenges such as high import duties and lack of tax incentives are barriers, and experts urge increased international support and awareness among financial institutions.
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