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Paving towards Strategic Investment Decision: A SWOT Analysis of Renewable Energy in Bangladesh

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  • Ridoan Karim

    (Department of Business Law & Taxation, School of Business, Monash University Malaysia, Jalan Lagoon Selatan, Bandar Sunway 47500, Malaysia)

  • Firdaus Muhammad-Sukki

    (School of Engineering and the Built Environment, Merchiston Campus, Edinburgh Napier University, 10 Colinton Road, Edinburgh EH10 5DT, UK)

  • Mina Hemmati

    (Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur 50603, Malaysia)

  • Md Shah Newaz

    (Faculty of Business and Law, Taylor’s University, No. 1 Jalan Taylor’s, Subang Jaya 47500, Malaysia)

  • Haroon Farooq

    (Electrical Engineering RCET, University of Engineering and Technology, Lahore, Pakistan)

  • Mohd Nabil Muhtazaruddin

    (Razak Faculty of Technology and Informatics, Universiti Teknologi Malaysia, Jalan Sultan Yahya Petra, Kuala Lumpur 54100, Malaysia)

  • Muhammad Zulkipli

    (Faculty of Engineering Technology, Universiti Tun Hussein Onn Malaysia, Pagoh Higher Education Hub, Pagoh, Muar 84600, Malaysia)

  • Jorge Alfredo Ardila-Rey

    (Department of Electrical Engineering, Universidad Técnica Federico Santa María, Santiago de Chile 8940000, Chile)

Abstract

Bangladesh, being a developing country, needs an uninterrupted electricity supply to sustain and expand economic growth. The government’s strategic vision of 2021 and the international commitment under the Paris Agreement has meant to attract new capital investments for renewable electricity generation by diversifying energy blends, ranging from natural gas to more reliable coal technologies and renewable energy. To understand the practical implementation of such policies, this paper explores the key factors of the renewable energy (RE) sector of Bangladesh. This research has adopted the strengths, weaknesses, opportunities, and threats (SWOT) analysis method to examine the RE market and to understand the determinants of foreign direct investment (FDI) to attract new investments. For the analysis purposes, data were collected from extant literature and semi-structured interviews from the RE experts in Bangladesh. This study bears significance as it empirically reflects the government’s vision and strategy on RE development and analyzes its challenges and recommends accordingly. The analysis of the study reveals that the regulatory framework, tax haven/exemption, higher tariff, and presence of government guarantee are the major strengths to draw foreign investment. On the contrary, land acquisition, lack of coordination and collaboration among government authorities, administrative procedures, corruption, and access to local finance turns out to be the key weaknesses to consider while investing in this sector. In terms of the external factors, increasing energy demand, increasing global awareness of climate change, and decreasing cost of RE setup equipment act as potent opportunities; while the dominance of fossil fuel and discontinuity of energy policies should be taken as threats that can hinder the flow of investment in this sector. Hence, in order to attract sustainable FDI in the RE sector, several key areas need to be strengthened in the short, medium, and long-term. These are: (i) regulations on non-discriminatory treatment to foreign investors; (ii) control of corruption; (iii) protection of intellectual property rights; and (iv) coordination and collaboration between ministries.

Suggested Citation

  • Ridoan Karim & Firdaus Muhammad-Sukki & Mina Hemmati & Md Shah Newaz & Haroon Farooq & Mohd Nabil Muhtazaruddin & Muhammad Zulkipli & Jorge Alfredo Ardila-Rey, 2020. "Paving towards Strategic Investment Decision: A SWOT Analysis of Renewable Energy in Bangladesh," Sustainability, MDPI, vol. 12(24), pages 1-30, December.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:24:p:10674-:d:465670
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