As Bangladesh prepares for its graduation from Least Developed Country (LDC) status, now expected in 2029, the nation stands on the brink of a major economic transition. Graduation will unlock new global opportunities but also phase out critical international support measures (ISMs). For the Ready-Made Garment (RMG) sector, which makes up nearly 80% of national exports, this shift could bring rising costs through higher tariffs, reduced access to technical support, increased borrowing costs, and wage pressures. At the same time, global buyers are increasingly integrating emission reduction targets and ESG disclosures into sourcing requirements, making sustainability and compliance essential for maintaining competitiveness.
In this changing landscape, renewable energy is proving to be more than a sustainability initiative, it is becoming a strategic business advantage. With renewable energy installations already demonstrating strong performance across industrial rooftops, solar power is now an investable reality for garment factories. Bangladesh’s average solar irradiation of 4–5 kWh/m²/day makes it well suited for solar energy generation. While the initial investment may seem significant, the long-term savings, improved resource efficiency, and protection against rising electricity tariffs make renewable energy an increasingly attractive business decision.
Lower-cost financing models are also making renewable energy more accessible. Under the Operational Expenditure (OPEX) model, factories pay only for the electricity they consume at an agreed tariff that is often lower than or competitive with grid electricity, even after inflation adjustments. An Energy Service Company (ESCO) finances, installs, operates, and maintains the renewable energy system throughout the contract period, removing the need for large upfront capital investments. At the end of the contract, ownership of the system may transfer to the factory, or the agreement can be renewed.
Transitioning to renewable energy gives garment factories greater control over their energy future while reducing operating costs and meeting the environmental and social standards expected by global buyers. As international brands work toward net-zero supply chains, factories powered by renewable energy are likely to become preferred sourcing partners. At the national level, Bangladesh aims to increase the share of renewables in its energy mix to 15% by 2030, 40% by 2041, and ultimately 100% over the longer term. The Net Metering Guidelines (2018) enable factories to offset electricity costs by exporting excess solar power back to the grid, while the Renewable Energy Policy 2025 proposes a 10-year corporate tax exemption for renewable energy producers, followed by partial tax relief. Together, these policies create a strong business case for garment manufacturers to begin investing in renewable energy.
At OneTrueValue, we are focused on supporting the garment industry in this transition. Through our Off-Grid Renewable Energy (ORE) II initiative, we help businesses de-risk their renewable energy investments through equity and technical support. Our vision is to accelerate the adoption of renewable and resource-efficient production, enabling Bangladesh’s garment industry to remain competitive, compliant, and climate-resilient in an evolving global marketplace.
