Bangladesh has established a $123 million fund to finance rooftop solar and other renewable energy projects as the government seeks to address persistent power shortages, according to the country's Finance Division on September 16.

The money has been reallocated from the development budget for the current fiscal year. The country's Power Division is also seeking financing from development partners including the Asian Development Bank, the Japan International Cooperation Agency and the World Bank.

Finance Division Joint Secretary Anarul Kabir said the initiative is intended to provide affordable financing on favorable terms for renewable energy installations, including rooftop PV systems.

The government aims to deploy 4 GW of rooftop solar capacity before next summer. The Renewable Energy Development Policy 2026–2030 targets a 20% share of renewables in Bangladesh's electricity generation mix by 2030, with rooftop solar expected to support the expansion.

The fund will provide concessional loans at residential, institutional and industrial levels, with Infrastructure Development Company Ltd, Bangladesh Infrastructure Finance Fund Ltd. and Palli Karma-Sahayak Foundation distributing the money.

Eligible projects include new, expanded and upgraded renewable energy installations. These include net-metered rooftop PV systems, solar home systems, industrial solar arrays and solar irrigation pumps.

The country currently has 1.85 GW of installed renewable capacity, including 1.47 GW of solar.