Bangladesh's reliance on LNG increases financial, energy and climate risks

This report by Zero Carbon Analytics examines Bangladesh's increasing reliance on imported liquefied natural gas (LNG) and the resulting financial, energy, and climate risks. It argues that the pivot toward LNG has left the country vulnerable to global price shocks and power shortages while stagnating renewable energy growth, ultimately exacerbating the country's extreme vulnerability to climate change and heat stress.

• Bangladesh has significantly increased its reliance on imported LNG to meet gas demand, while failing to meet renewable energy targets. By 2022, LNG imports met 22% of the country's total gas demand, whereas renewables generated only 2% of electricity and made up 3.75% of installed capacity.
• The shift to imported LNG exposed Bangladesh to severe energy instability during the 2021-2022 global energy crisis. High spot market prices and reduced supplies from Qatar led to widespread power cuts; in October 2022, blackouts affected 75%-80% of the country, leaving 130 million people without power and causing industrial production in sectors like garments to fall by 25%-50%.
• Energy instability is expected to persist as Asian LNG prices are forecast to remain high through the late 2020s. Despite this, Bangladesh plans to increase LNG import capacity by more than 150%, with imports forecast to rise by over 350% between 2020 and 2030.
• Investment in gas infrastructure poses significant financial risks, including the potential for stranded assets and an unsustainable debt burden. Bangladesh has planned USD 16.5 billion in new gas infrastructure and reportedly faces an annual debt bill of USD 2 billion from power sector mega projects focused on fossil fuel development.
• Climate change, accelerated by global LNG expansion, poses an existential threat to Bangladesh due to its geography. By 2050, the country could see up to 19.9 million internal climate migrants. Currently, 56% of the population lives in areas with high exposure to climate change, and tropical cyclones cost the country USD 1 billion annually.
• Heat stress resulting from climate change is projected to cause severe economic and health impacts. Bangladesh is projected to lose approximately 4.9% of its GDP to heat stress by 2030, representing a potential loss of USD 95.75 billion. Labour losses are also significant, with current temperatures causing 254 hours of labour loss per person annually.
• Renewable energy is a more cost-effective and reliable alternative to LNG, yet it remains underfunded. In late 2022, the cost of energy from rooftop and utility-scale solar (BDT 5.5 and BDT 7.6 respectively) was lower than the average electricity generation cost of BDT 10. However, between 2000 and 2020, renewables received only 17% of the USD 10.9 billion in public finance for electricity generation.

APA

Team, Z. (2023). Bangladesh's reliance on LNG increases financial, energy and climate risks. Zero Carbon Analytics. https://zerocarbon-analytics.org/energy/bangladeshs-reliance-on-lng-increases-financial-energy-and-climate-risks/

Chicago

Team, ZCA. Bangladesh's reliance on LNG increases financial, energy and climate risks. Zero Carbon Analytics, 2023. https://zerocarbon-analytics.org/energy/bangladeshs-reliance-on-lng-increases-financial-energy-and-climate-risks/.

Wikipedia

{{cite report |last1=Team |first1=ZCA |title=Bangladesh's reliance on LNG increases financial, energy and climate risks |publisher=Zero Carbon Analytics |date=9 May 2023 |url=https://zerocarbon-analytics.org/energy/bangladeshs-reliance-on-lng-increases-financial-energy-and-climate-risks/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{team2023bangladeshs, author = {Team, ZCA}, title = {{Bangladesh's reliance on LNG increases financial, energy and climate risks}}, institution = {Zero Carbon Analytics}, year = {2023}, month = may, url = {https://zerocarbon-analytics.org/energy/bangladeshs-reliance-on-lng-increases-financial-energy-and-climate-risks/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }