Investing In Green: Bilateral Investment Treaties (Bits) And Their Role In Bangladesh’s Renewable Energy Sector `

Abstract

Bangladesh, despite its abundant natural resources and strategic location, faces
significant challenges in transitioning to renewable energy (RE). While the
Government of Bangladesh (GoB) has committed to increasing RE capacity to 30
percent by 2030 and 40 percent by 2041, actual deployment remains slow,
comprising only about 3.57 percent of installed capacity in 2022. Bilateral
Investment Treaties (BITs) have traditionally been used to attract foreign direct
investment (FDI), but few, if any, of Bangladesh’s existing BITs explicitly address
the renewable energy sector. This article argues that incorporating RE-specific
clauses in future or renegotiated BITs is critical for fostering a stable investment
climate, mitigating legal risks, and accelerating sustainable energy development.
Drawing on Bangladesh’s policy frameworks—including the Sustainable and
Renewable Energy Development Authority (SREDA) Act (2012)—this article
identifies key legal gaps and proposes BIT provisions that could facilitate RE
investment. Through a qualitative analysis of Bangladesh’s existing 31 BITs and
lessons from global best practices, we provide a comprehensive blueprint to align
BIT frameworks with national energy goals, thereby strengthening Bangladesh’s
position in global climate commitments and enhancing energy security.