Harnessing renewable energy growth for Bangladesh’s digital future

Bangladesh is actively pursuing a variety of policies designed to facilitate its digital transformation and the growth of its digital economy, with the goal of shifting from a primarily manufacturing-based economy to a more knowledge-based society. These initiatives, including the Digital Bangladesh program (ICT Policy 2009), Smart Bangladesh (ICT Master Plan 2041), and National Artificial Intelligence Policy 2024, focus on harnessing the global digital revolution to kickstart technological innovation and digital transformation in Bangladesh.

However, the core of Bangladesh’s efforts to shape its digital future relies primarily on Bangladesh’s ability to truly harness its renewable energy sector. Despite its ambitious plans, power problems continue to plague Bangladesh, especially in the country’s growth-stage IT industry, where demand for energy far outpaces supply. In fact, Bangladesh experienced power outages for over 30% of all of 2022, highlighting the desperate need for Bangladesh to grow its energy supply.

As Bangladesh moves toward a more digitally-driven economy, addressing its energy challenges becomes critical, not only for ensuring infrastructure sovereignty, but also for safeguarding its digital sovereignty.

Renewable energy investment

Bangladesh has one of the highest rates of power demand growth globally, resulting in a heavy reliance on fossil fuels, with 65% of its power generation coming from natural gas, while coal usage continues to increase as a source of electricity. Additionally, Bangladesh’s usage of coal will most likely increase as coal prices continue to fall due to reduced demand, increased coal supply, and shifts among developed nations to renewable energy, among a variety of other factors. As a result, Bangladesh needs to grow its renewable energy industry to plan for less dependency on harmful energy sources like natural gas and coal.

Bangladesh’s efforts to grow its renewable energy sector have resulted in a significant need for foreign direct investment in its energy sector. China has played a leading role in Bangladesh-specific investments in renewable energy, with a focus on solar energy. Mid-2024 saw the announcement of a 100MW solar plant to be built by a joint venture between China's CREC International Renewable Energy Company and Bangladesh's state-owned B-R Powergen Limited (BRPL). Around the same time, a venture led by the Chinese firm Bangladesh-China Renewable Energy Company (BCRECL) resulted in the commissioning of the 68MW Sirajganj Solar Park. Additionally, China’s Huadian Corporation signed an agreement in mid-2024 to develop a solar facility with projected power production of 160MW.

Early 2024 also saw the beginning of operations for the 60MW Cox’s Bazar wind plant, noted as “the first centralized wind power project in Bangladesh invested and constructed by Chinese enterprises.” The BCRECL has also taken efforts to establish a 50MW wind power plant in Payra.

Chinese investment in Bangladesh’s renewable energy sector continues to build, with notable Chinese solar manufacturer LONGi announcing its interest in Bangladesh-specific investments in March 2025. This visit built on a previous visit in late 2024 featuring LONGi and Tongwei Co., Ltd., another Chinese-based solar manufacturer, with both these trade delegations highlighting the increasing interest for Chinese firms and investors in controlling Bangladesh’s renewable energy sector.

Investments in physical infrastructure

China’s involvement in Bangladesh extends beyond renewable energy, with China being a major player in financing and constructing critical infrastructure in Bangladesh, including ports, bridges, and power plants. As of mid-2024, China accounted for 27 power projects in Bangladesh, with the coal-fired Payra power plant, generating an impressive 1,320 MW of power, being built as part of China’s Belt and Road Initiative.

China has played a large role in developing and constructing crucial infrastructure in Bangladesh, ranging from ports to special economic zones (SEZs). Bangladesh’s Mongla port, its second largest port, received a loan of $400 million for modernization efforts on March 28, 2025. Bangladesh’s largest port, Chittagong port, alongside the Payra port, both of significant strategic importance in the Indian Ocean, were both constructed by Chinese state-owned enterprises (SOEs), building on China’s strategy of establishing a crucial presence at strategic maritime centers throughout the globe. Additionally, the planned Chinese Economic and Industrial Zone, noted as the “first industrial zone in Bangladesh invested, developed, and operated by a Chinese company,” has gained immense investment traction and acceleration in recent months, particularly given a bilateral meeting between leaders Muhammad Yunis and Xi Jinping in Beijing on March 28, 2025.

China has also been a major source of financing, construction, and technical assistance in terms of bridge infrastructure in Bangladesh. The Padma bridge, a 6.15km bridge built at a cost of nearly $4 billion, was constructed by Chinese SOE China Major Bridge Engineering Company. As of late 2023, China was building over 20 bridges in Bangladesh, with over 650 companies investing into the country during the same period, with Chinese loans totalling just over $2.33 billion this time.

Need for digital infrastructure sovereignty

Assuming Bangladesh can resolve its domestic power generation issues with clean energy controlled by Bangladesh interests, it must also take its digital infrastructure sovereignty into consideration as Bangladesh develops its digital economy.

In the same vein, Bangladesh’s digital infrastructure is already seeing growing dependencies on Chinese firms and investment. In December 2024, Huawei announced efforts to bolster Bangladesh’s digital infrastructure development, notably co-launching an innovation lab with the Bangladesh government and establishing a China-Bangladesh fintech exchange program. Mid-2024 also saw Bangladesh’s former Information Minister Hasanul Haq Inu lauding China’s technology innovation in telecommunications, e-commerce, green energy, and agriculture, and much more.

These efforts build on Huawei’s significant role, alongside other Chinese technology giants like ZTE, in growing Bangladesh's digital industry, with key use-cases including 5G, enterprise cloud solutions, and much more. The Chinese government has also played a large role in advancing Bangladesh's technology development, completing a joint project in late 2022__,__ to connect 2,600 government offices in a move to solidify national connectivity.

Conclusion

In conclusion, Bangladesh's pursuit of a digital economy hinges on its ability to address critical challenges in energy infrastructure, with a focus on developing its renewable energy sources. With power shortages continuing to hinder growth, investing in clean sustainable energy is paramount for the nation’s digital transformation.

While Chinese investments in energy, infrastructure, and digital technology have accelerated progress, they also highlight the need for Bangladesh to carefully manage its long-term energy and digital sovereignty.

If it is able to secure a sustainable energy future, Bangladesh can effectively harness its full potential to develop its digital economy while maintaining its digital infrastructure sovereignty, enabling it to emerge as a competitive player in the global digital economy.

Image courtesy of the Institute for Energy Economics and Financial Analysis.