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.

The Finance Division announced the fund on Wednesday. The money has been reallocated from the development budget for the current fiscal year.

The Power Division is also seeking financing from development partners, including the Asian Development Bank, the Japan International Cooperation Agency and the World Bank. The government aims to deploy 4 GW of rooftop solar capacity before next summer.

The new fund will provide concessional loans for renewable energy projects at the residential, institutional and industrial levels.

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 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.

Infrastructure Development Company Ltd. (IDCOL), Bangladesh Infrastructure Finance Fund Ltd. (BIFFL) and Palli Karma-Sahayak Foundation (PKSF) will distribute the funds.

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.

Bangladesh currently has 1,852 MW of installed renewable energy capacity, including 1,473 MW of solar.