Powering RMG, securing the future

The ready-made garment (RMG) industry is the heartbeat of Bangladesh's economy, an engine of prosperity that drives exports, creates millions of jobs and shapes the nation's global identity. This vibrant sector thrives on precision, speed and reliability. Yet it can also be brought to a standstill in an instant by an all-too-familiar challenge: the sudden loss of power.

Such interruptions are not minor technical glitches. They disrupt operations, erode profit margins, jeopardise delivery schedules, and ultimately threaten Bangladesh's position as a dependable sourcing hub for global brands.

At the core of this challenge lies an overreliance on natural gas. For years, domestic reserves sustained industry, but these are now in decline. As a result, the sector depends increasingly on imported liquefied natural gas (LNG), whose volatile global prices eat into profit margins and weaken competitiveness. The country's fragile power infrastructure compounds the problem, with frequent outages forcing factories to switch to costly, high-emission diesel generators. Beyond raising costs, this practice undermines Bangladesh's environmental reputation at a time when buyers are paying closer attention to the carbon footprint of their supply chains.

One particularly damaging barrier is the two-tiered gas tariff system, under which newer factories pay significantly higher rates than older ones. This policy penalises innovation, discourages investment and disadvantages new manufacturing clusters in emerging economic zones. The challenge is worsened further by underdeveloped LNG infrastructure, which lacks adequate storage and depends on floating terminals that are vulnerable to disruption. In many industrial zones, low gas pressure forces smaller enterprises to rely on even more expensive and polluting fuels, creating inequities in energy access.

Renewable initiatives, such as rooftop solar programmes, offer promise but remain insufficient for the RMG sector's vast power needs. At present, solar accounts for only a fraction of total demand. Large-scale renewable projects face regulatory delays, logistical constraints and inadequate integration into the national grid. For smaller enterprises, unclear policies and a lack of support mean the clean energy transition feels out of reach, leaving them locked into costly and unreliable supply arrangements.

Given these realities, energy efficiency is no longer optional; it is a business necessity. Modern, high-efficiency motors, advanced machinery drives and contemporary boilers can drastically reduce consumption and costs. For example, a factory using 200,000 kWh a month at Tk 10 per kWh faces a bill of Tk 2 million. Cutting energy use by just 15 percent through efficiency measures could save Tk 300,000 a month, or Tk 3.6 million a year, funds that could be reinvested into new equipment, training or sustainability projects. In a competitive global market where environmental credentials are as important as price, efficiency strengthens both profitability and brand reputation.

However, efficiency alone will not solve the crisis. Bangladesh's RMG sector requires a coordinated energy transition strategy built on clear priorities. First, gas tariffs must be reformed to eliminate the two-tiered system, ensuring fairness and encouraging investment. Second, LNG infrastructure must be expanded with land-based terminals, dedicated storage tanks and modular distribution networks to secure a stable supply.

Third, renewable adoption must be accelerated through streamlined approvals, stronger grid integration and policies that allow factories to sign direct power purchase agreements with private producers. Fourth, government incentives such as low-interest loans, tax breaks and subsidies should be paired with technical support to drive upgrades. Finally, public-private partnerships should fund large-scale renewable projects while ensuring smaller enterprises have equal access to affordable, clean power.

Energy policy cannot be separated from industrial strategy. Without reliable and affordable power, factories will struggle, jobs will be lost, and Bangladesh's ambition to become a resilient, middle-income nation will falter. The path forward is clear: building a stable, sustainable and inclusive energy future for the RMG sector is not just about reducing emissions, it is about securing livelihoods and ensuring continued growth in an increasingly competitive world.

The writer is managing director of Bangladesh Apparel Exchange