Financing solar in Bangladesh
Cheap capital for clean energy exists, and most of it goes unused. The constraint is rarely liquidity. It is that applications arrive incomplete, and lenders cannot assess what they are being sent.
The situation
The money is there and it is not moving
Bangladesh Bank operates a refinance scheme for green products that caps the borrower rate at 5% for clean energy projects, against market lending that typically runs well above 10%. The general green refinance scheme is sized at Tk 10 billion, roughly USD 82 million.
Between January 2018 and September 2024, the highest disbursement rate that scheme reached was 41.6%. Most of the facility sat unused. For a country that needs to add renewable capacity quickly, that is a striking number, and it is not explained by a shortage of projects.
Why uptake is low
Four barriers, none of them the interest rate
IEEFA’s analysis of the scheme identifies obstacles that are procedural rather than financial. They are worth knowing because every one of them is addressable before you apply.
A belief that it is expensive
Industries frequently assume refinance money is costly and the tenure unsuitable, and never test the assumption. The headline rate is materially below what the same borrower would pay commercially.
The paperwork looks forbidding
The process is seen as lengthy and documentation-heavy. It is demanding, but it is a known list. Most of what is required is engineering output that should exist anyway on a properly developed project.
Approval risk after committing
Borrowers fear taking a market-rate loan and then being refused refinance, leaving them on the expensive facility. Sequencing and preparing the technical case early is what reduces that exposure.
Lenders cannot always assess it
Financial institutions often lack the internal capacity to evaluate clean energy projects or to understand rooftop solar under net metering. An application that teaches the credit committee what it is looking at performs very differently from one that does not.
What a lender needs
What a bankable application contains
A credit committee is not assessing solar. It is assessing whether a cash flow will service a loan for its tenure. The documentation has to answer that question in terms the committee already uses.
Evidence of generation
Not a brochure figure
Yield modelled against local irradiance for your specific roof, with shading and orientation accounted for, defensible enough that a third party could rebuild it.
- Site survey rather than desk estimate
- Annual and seasonal generation profile
- Degradation assumptions stated
Evidence of saving
From your own bills
Twelve months of consumption and tariff data, producing a savings profile that shows the loan can be serviced from the reduction in energy cost alone.
- Effective rate, not headline tariff
- Daylight share of consumption
- Sensitivity to tariff movement
Evidence the asset survives
For the full tenure
Equipment specification, warranties, structural assessment and compliance, so the committee can see the asset will still be generating when the last instalment falls due.
- SREDA approved product list verification
- Structural capacity of the roof
- Net metering approval pathway
Routes
If debt is not the answer
Not every buyer wants the asset on their balance sheet, and not every balance sheet will carry it. There are three other structures in common use.
Power purchase agreement
Zero capital outlay
A third party funds, owns and operates the system on your roof. You buy only the units you consume, usually below your grid tariff, with no capex and no maintenance obligation.
Corporate PPA
Larger industrial load
Power is contracted from a dedicated plant rather than your own roof, which suits sites where consumption exceeds what the available roof can generate.
Supply chain programmes
For corporates with vendors
A buyer enables solar across its vendor base, financed around the vendors’ own cash cycles rather than their individual balance sheets.
Where we fit
We prepare the case, the bank makes the decision
Amrark holds an MoU with City Bank PLC under their USD 50 million green financing facility, and we prepare the technical documentation a credit committee needs. We do not lend, and we cannot promise an approval. What we can do is make sure the application that reaches the committee answers the questions it is going to ask.
Sources: IEEFA, “Driving Bangladesh Bank’s low-cost green refinance schemes”; Bangladesh Bank refinance scheme terms for green products. Scheme terms, rates and eligibility are revised periodically and should be confirmed with your lender.
Find out what your project could be financed at
Send a recent electricity bill and a rough roof area. We will come back with an indicative system size, a financing route, and the numbers behind both.