Dhaka: Bangladesh’s garment factory rooftops have the potential to generate nearly 1,768 megawatt-peak (MWp) of solar power, yet only 3 percent of the sector’s electricity currently comes from renewable sources. According to United News of Bangladesh, a new study by the Centre for Policy Dialogue (CPD) maps a $188.2 million investment pipeline aimed primarily at Chinese financiers to unlock this potential.
The findings were unveiled at an event titled “Industrial Rooftop Solar in RMG: Investment Potential for Chinese FDI,” organized by CPD’s Power and Energy Studies programme at BRAC Centre in Mohakhali. This event was part of the 5th Bangladesh-China Renewable Energy Forum. The study highlighted that Bangladesh’s RMG sector, responsible for about 85 percent of national export revenue, is operating at only 30-40 percent capacity due to grid instability and gas shortages, even as global buyers like H and M, Inditex, Walmart, Gap, and M and S enforce stricter decarbonisation mandates.
The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) mandates 35 percent renewable power procurement by 2035. Despite this pressure, a survey of 878 factories in Gazipur and Narayanganj revealed that only 3 percent of consumed electricity is renewable, far below the 14 percent of demand that could be met by rooftop solar alone.
Researchers used satellite rooftop mapping and machine-learning demand modeling across 3,320 factories to estimate the total rooftop solar potential in the RMG and textile sector at 1,768.3 MWp, generated from over 9.7 million square meters of usable roof area. Of 1,900 non-adopter factories evaluated, 2,303 were found technically and financially viable, requiring a combined investment of $188.2 million.
Small factories, despite being the cheapest to electrify individually, account for the largest share of the aggregate investment need, amounting to $75.7 million across 1,922 units. The study categorized factories into four investability tiers, revealing that large factories are more likely to be “Investment-Ready,” while small factories often require structural or regulatory interventions.
The research emphasized that access to concessional or “green” financing is crucial for investment readiness. At blended financing rates of around 9.8 percent, approximately 509 factories qualify as investment-ready; however, at commercial rates of 10.5 percent or higher, that number drops to zero.
A sensitivity analysis indicated that capital cost, tariff levels, interest rates, and loan tenure could impact bankability by 74-81 percentage points, with the sector’s median debt-service coverage ratio close to the 1.25x bankability threshold. The report highlighted Ha-Meem Group’s phased 12.2 MWp solar rollout as a model, noting its Kaliganj unit runs entirely on solar during daytime hours, eliminating feeder-level load-shedding.
However, challenges such as a 2.5-month wait for SREDA equipment approval and metering coordination gaps causing billing disputes were also noted. The study identified high financing costs for SMEs, slow SREDA approvals, and a buyer-imposed rule reserving 20 percent of rooftop space for “helicopter evacuation” as bottlenecks.
Inconsistent net-metering practices across DESCO, DPDC, and PBS, along with the lack of a framework for third-party power wheeling between factories, were pointed out. Recommendations included a blended green-financing facility combining IDCOL’s 5-7 percent concessional debt with Chinese green capital, a BGMEA facilitation desk for partnerships with vetted Chinese EPC firms, cluster-based aggregation of small and medium knitwear units, and faster SREDA interconnection approvals.