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Our challenges for  renewable energy

Published : Saturday, 25 November, 2023 at 12:00 AM  Count : 784

Since the pressing need for sustainable energy solutions has taken centre stage globally, Bangladesh has embarked on massive initiatives to harness its renewable energy potential. A recent report by EY Singapore shed a light on the critical hurdles obstructing the flourishing of utility-scale wind and solar projects in the country. It underscores the imperative to tackle policy and regulatory barriers to unleash substantial volumes of renewable energy finance.

Asia, with its rapid developmental trajectory, anticipates an astounding 80% surge in energy demand by 2050. However, the study accentuates the profound impact of recent rating downgrades on Bangladesh's renewable energy financing landscape, flagging the availability of finance as a formidable obstacle.

Delving beyond financial constraints, the report delineates non-financial barriers such as convoluted permit processes, land acquisition challenges, and stringent content requirements, all formidable obstacles complicating the renewable energy landscape.

The crux of the matter lies in addressing both financial and non-financial impediments to catalyse the growth of renewable energy projects not just in Bangladesh but across Asia. Despite the constraints posed by recent downgrades affecting finance availability, surmounting non-financial barriers holds the key to enhancing the feasibility of financing renewable energy ventures in Bangladesh.

A holistic approach that mitigates policy and regulatory barriers emerges as the linchpin to unlock substantial volumes of renewable energy finance for utility-scale wind and solar projects. This approach aims not only to enhance the investment climate but also to facilitate the development of sustainable and cost-effective renewable energy ventures.

The report pinpointed specific barriers in Bangladesh, such as an underdeveloped local supply chain, declining creditworthiness impacting power purchase agreement bankability, and macroeconomic challenges dampening investment prospects. Proposals to navigate these challenges include formulating renewable energy procurement frameworks, strategic year-wise action plans, and seeking support from international development agencies through risk insurance and grants to enable financing.

Bangladesh, recognized for its abundant solar and wind resources, stands to reap the benefits of energy security, economic growth, and reduced emissions by harnessing these resources. Gilles Pascual from Ernst & Young underlines the role of renewable energy in diminishing reliance on fossil fuel imports. Collaboration with development finance institutions and proactive governmental involvement in identifying suitable land plots are crucial steps toward expediting the deployment of renewable energy projects.

In essence, addressing policy and regulatory bottlenecks is not just a necessity; it's an opportunity for Bangladesh and Asia as a whole to pave the way for a sustainable energy future. Unlocking these barriers will not only spur economic growth but also mitigate environmental challenges, steering the region towards a more resilient and sustainable energy landscape.

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