Bangladesh faces critical challenges in the energy sector

Published : Friday, 11 April, 2025 at 7:29 PM Count : 115

One of the greatest joys and satisfactions of my life has been contributing to the development of Bangladesh’s infrastructure—particularly during a time when the country urgently needed modern port facilities. We built the first inland container depot, port-related infrastructure, and terminals for oil storage. That’s how it all began.

My journey into Bangladesh’s energy sector started at a critical juncture in the nation’s development. At the time, the country’s most pressing issue was the lack of electricity. In 1995–96, only around 20% of the population had access to electricity. I vividly remember those days, and I am both humbled and happy that we began generating electricity at that time. Today, 100% of the population has access to electricity in Bangladesh. That I played a part in this transformation—that Summit was part of it—is my greatest satisfaction.

Challenges Facing Bangladesh’s Energy Sector

Despite the impressive progress in electricity coverage, Bangladesh still faces formidable energy challenges. I have identified several critical issues that could impede the country’s continued economic growth if not addressed effectively.

First among these is the rising demand for electricity driven by technological advancement. I firmly believe that increased electricity consumption—spurred by the growth of artificial intelligence, cloud computing, and related technologies—could soon outstrip supply. This is already happening in parts of the world, such as the U.S. and Europe, where large-scale AI deployment is underway.

This observation mirrors global trends. In the U.S. alone, projections suggest that by 2030, data centres could consume up to 9% of the country’s total electricity output—double the current level.

In Bangladesh, several factors are contributing to rising electricity demand: a growing population with increasing residential electricity needs; a surge in internet users driving the need for data centres; a wider adoption of household electrical appliances; and the increasing use of battery-powered vehicles, such as electric rickshaws.

A second major challenge lies in Bangladesh’s limited capacity for renewable energy development within its borders, largely due to land constraints in this densely populated country.

The Renewable Energy Imperative

For Bangladesh to achieve sustainable growth, a transition to renewable energy is essential—though not without challenges. The country must diversify its energy sources while contending with geographic limitations that restrict domestic renewable development.

With only 55,000 square miles of land, Bangladesh has little scope to generate sufficient green electricity within its own borders. However, just beyond our frontiers—particularly in India, Bhutan, and Nepal—there is enormous potential. Nepal, for instance, has an abundance of green hydropower. We must harness these regional sources and import clean energy into Bangladesh.

This cross-border strategy represents the most viable path forward, as envisioned by Summit Group. We have been actively pursuing regional renewable partnerships, including plans to import up to 1,000 megawatts of green electricity from India.

Ayesha Khan, Managing Director and CEO of Summit Power International, has explained: “It has to make economic sense. When renewables cost less than fossil fuel-based electricity, then people will switch to renewables. But the way renewables are heading, that is what is going to happen.” She rightly adds that Bangladesh remains “a very cost-sensitive economy” and cannot afford expensive energy solutions.

The vulnerability of Bangladesh to climate change further heightens the urgency of this renewable transition. The impact is already evident: we produce 45 million tonnes of rice each year in our 55,000 square miles, and up to 50% of that goes underwater during floods triggered by climate change.

Financial Innovation and Global Partnerships

Addressing these energy challenges requires not only technical solutions but also financial innovation. Summit Group’s decision to incorporate in Singapore in 2016 demonstrates the kind of financial engineering required to support major energy infrastructure projects.

Our move to Singapore was driven by the need to access more favourable financial terms. Bangladesh holds tremendous potential for growth, but it lacks robust governance and a mature financial market—both of which are crucial for executing long-term infrastructure projects, which is precisely what we aim to do for Bangladesh.

The Singapore incorporation has enabled Summit to secure financing at competitive rates, thereby helping to reduce electricity costs for Bangladeshi consumers. It also attracted major international partners, including Japan’s JERA Co., which acquired a 22% stake in Summit Power International in 2019 for $330 million.

Summit’s dual identity—as a Bangladeshi company with deep local understanding and an internationally structured entity with access to global capital markets—offers a model for other energy firms in developing economies.

Education as Infrastructure

To me, infrastructure development goes beyond the physical. It also encompasses social progress—particularly education, which I view as fundamental to equality and opportunity.

True equality comes through education. Education is the world’s greatest equaliser. Providing such opportunities is one of my proudest contributions.

As part of its corporate social responsibility initiatives, Summit Group has established schools in communities near its power plants, supporting the education of approximately 8,000 underprivileged children.

This focus on education reflects my broader philosophy of corporate responsibility. The creation of wealth should not be solely for personal gain or pleasure—it should also serve the advancement of humanity.

Summit Group’s Solutions

Summit Group has proposed and implemented several solutions to meet Bangladesh’s energy needs. We continue to adopt cutting-edge technologies, including GE’s most efficient combined cycle gas turbines, and we are positioning ourselves to eventually utilise hydrogen fuel.

Our approach reflects a careful balance between pragmatism and aspiration—meeting today’s urgent needs while pursuing long-term sustainability. As Bangladesh embarks on a complex energy transition, Summit Group is poised to play a pivotal role.

The author is the founder and chairman of Summit Group.

FP/MI