CPD raises questions over limited allocation for renewable energy and energy transition targets

PNN News Desk. Dhaka

The Centre for Policy Dialogue (CPD) has expressed concern over the limited allocation for the renewable energy sector in the proposed national budget for the fiscal year 2026–27. According to the organization, only a very small portion of the power generation budget has been allocated to clean energy, which may pose a major challenge for the government’s long-term energy transition plan.

This observation was presented at a media briefing held at CPD’s Dhaka office in Dhanmondi on Wednesday. The briefing analyzed the theme “Proposed National Budget 2026–27: What Did the Power and Energy Sector Receive?”

According to CPD’s analysis, a total allocation of Tk 17,345 crore has been proposed for the Ministry of Power, Energy and Mineral Resources. Although this is slightly higher than the revised budget, the overall share in the national budget has decreased compared to the previous year.

The report noted that while the Power Division’s allocation has slightly decreased, the allocation for the Energy and Mineral Resources Division has increased significantly, mainly due to higher investment in gas exploration and extraction activities.

However, CPD welcomed some positive initiatives in the solar energy sector, including long-term tax holidays for solar power production, tax rebates for consumers, reduced taxes on batteries and solar components, and tax exemptions for electric vehicle charging infrastructure.

On the other hand, CPD criticized continued incentives for new coal exploration and coal-based power plants, stating that such policies are inconsistent with energy transition goals.

CPD Research Director Khondaker Golam Moazzem said that although there are some positive incentives, fossil fuels are still receiving greater advantages. He called for a more balanced tax and subsidy structure.

Concerns were also raised regarding solar irrigation expansion in agriculture, stating that without targeted support for farmers, large-scale adoption would be difficult.

Experts say increased investment in renewable energy is essential to address climate risks and ensure sustainable energy security. Otherwise, achieving national targets may become difficult.