Bangladesh Apparel Sector Needs $XXX Billion to Close Decarbonisation Funding Gap

The textile-dominant apparel export industry in Bangladesh has by now become a central arena for deploying rooftop solar as a tangible route toward decarbonisation. Given that suppliers’ emissions account for about 96% of brands’ supply-chain footprint, fashion buyers are increasingly deploying financial mechanisms to accelerate solar rollout among factories that cannot afford high upfront costs [primary source, corroborated by].

Despite strong demand and brand support, the scale of deployment remains modest. The Greener Garments Initiative (GGI) has installed “more than seven MW-peak (MWp)” in roughly two years, achieving a growth rate exceeding 200% over 18 months [primary source]. But this is still far from the 3,000 MW target the Bangladeshi government has set for rooftop solar on public buildings by end-2025. The discrepancy reflects a broader issue: the target may not be technically feasible given limited load, administrative capacity, and available high-quality EPC firms.

Financially, there is a large gap. The Apparel Impact Institute’s recent 2025 report estimates the Bangladesh apparel sector needs US$ 6.6 billion by 2030 to halve emissions, but only ~US$ 1.8 billion is currently committed. Brand-led ESCO models help suppliers bypass upfront cost barriers by allowing them to pay for power over time instead of capital expenditure]. However, scaling similar models poses risk: smaller suppliers may struggle to enter complex contracts or secure credit; buyers must offer credible long-term purchase commitments to reduce investment risk for all parties.

From a policy and institutional standpoint, several enabling moves are underway, but demand stronger execution. Important developments: net-metering rules now allow factories to sell excess solar power back to the grid; the central bank has rolled out sustainable finance policies and low-cost refinance schemes. Yet, structural constraints persist: public building load may not support the government’s rooftop target; only about 15-20 high-quality EPC firms are active; soiling and load-shedding threaten output integrity; maintenance regimes are weak.

Strategic implications: for brands and suppliers, investing in rooftop solar via ESCO or OPEX models can reduce operating costs and reduce Scope 3/indirect emissions, enhancing supply security. For financial institutions, blended finance, risk sharing, and concessional capital are under-utilised but crucial to close the gap. For government, realistic target setting, careful assessment of rooftop potential, strong regulatory enforcement, fiscal incentives (tax, duty relief), and capacity building (EPCs, O&M) will be important.

Open questions: How accurate are the estimates of rooftop potential on industrial and public building stock? What is the real cost and risk of operations & maintenance (O&M) under ESCO vs CAPEX in Bangladesh’s weather and load conditions? How do rooftop solar projects intersect with industrial electrification, tariff changes, and competition with grid prices? What forms of guaranteed long-term demand from brands or procurement agencies can unlock additional investment?