Originally posted in Daily Sun on 15 August 2026
Factory reopening drive faces energy hurdle
Experts suggest rooftop solar, phased factory reopening
The government’s drive to revive long-closed factories risks running into the same energy crisis already crippling operating industries, with experts warning that reopening idle plants without first securing reliable gas and power could undermine the investment, jobs and industrial growth the initiative seeks to generate.
They have called for a phased and transparent reopening process, stronger gas infrastructure and greater use of renewable energy, particularly rooftop solar.
The government has already leased three closed state-owned jute mills to two private companies to bring them back into production.
An agreement to this effect was signed on Tuesday between the Bangladesh Jute Mills Corporation (BJMC), PRAN-RFL Group and Hamko Group in the presence of Prime Minister Tarique Rahman.
The three mills will be reopened under private management after remaining closed for a long period.
Once operational, they are expected to create at least 11,629 jobs, attract around Tk619 crore in investment and generate combined annual turnover of about Tk1,175 crore.
The government plans to reopen 20 of the 25 BJMC mills currently closed or out of production through leasing and private management.
Lease agreements for 14 mills have so far been completed and possession handed over to the respective leaseholders. Production has resumed at nine of them.
Existing industries struggle
The worsening gas and power crisis is already disrupting manufacturing, raising production costs and threatening supply chains, business leaders said.
Export-oriented industries are particularly vulnerable as repeated energy shortages make it increasingly difficult to maintain production schedules and meet buyers’ delivery deadlines.
More than 200 small and subcontracting garment factories in Gazipur recently sent workers on three days’ leave because of the gas shortage. Factories in Savar, Ashulia and Narayanganj have also been severely affected.
According to BGMEA members, garment factories are currently operating at 25% to 30% below capacity because of inadequate gas and electricity supplies.
BGMEA President Mahmud Hasan Khan said the crisis was not sudden but the result of failing to take the right decisions at the right time.
For a long-term solution, Bangladesh needs at least three to four floating storage and regasification units (FSRUs) so that the failure of one facility does not cause major disruption to the gas supply system, he said. The country should also move towards land-based LNG terminals to reduce investment risks.
Mahmud said Bangladesh has around 1.2 million irrigation pumps running on diesel.
“If these pumps can be rapidly converted to solar power, the electricity saved could be supplied to industries, while also reducing pressure on diesel imports,” he noted.
Small factories suffer most
Former BGMEA president Faruque Hassan said the energy crisis was currently the biggest challenge facing industry.
“Before reopening closed factories, the government should first ensure a stable energy supply so that existing factories can continue operating,” he said.
While reopening factories was a positive initiative, he said, it was particularly important to ensure that garment factories previously shut over compliance or safety concerns met all standards before resuming production.
Otherwise, workers could be put at risk and Bangladesh’s international reputation damaged if another industrial accident occurred, he added.
The gas shortage is also affecting electricity generation because many power plants rely on gas and cannot operate at full capacity, leading to widespread load-shedding, particularly in industrial zones.
Smaller factories are bearing the greatest burden because they rely on diesel generators during power outages, pushing up production costs, fuel imports and carbon emissions.
Faruque, also managing director of Giant Group, said higher costs were eroding the competitiveness of Bangladesh’s exports. Production delays could result in cancelled orders, buyer discounts and cash-flow problems.
Renewable energy could form part of the long-term solution, he said, but would require substantial investment, supportive policies, affordable financing and tax incentives.
370 factories recommended for loans
Meanwhile, the country’s three largest textile and apparel trade associations have recommended 370 closed and struggling factories to Bangladesh Bank for loans under the government’s Tk60,000 crore stimulus packages.
BGMEA submitted 140 garment factories, while the Bangladesh Textile Mills Association (BTMA) recommended 130 textile, spinning, weaving, dyeing, finishing and printing mills. The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) put forward 100 factories.
Industry insiders said the factories were selected based on prolonged shutdowns, financial deterioration and loan rescheduling.
Experts favour phased reopening
Speaking to Daily Sun, Centre for Policy Dialogue (CPD) Research Director Dr Khondaker Golam Moazzem said reopening closed factories was a positive initiative, particularly because much of the required infrastructure was already in place.
“If an investor wants to establish a new industrial plant, they first have to acquire land, secure gas, electricity, and water connections, and recruit workers. These are significant challenges. In contrast, closed factories already have much of this infrastructure, making them far more attractive for potential investors,” he said.
But the process must be transparent, he stressed, recalling instances in the past when factory allocation was politically influenced.
“As a result, the intended economic benefits were not fully realised. Ensuring a fair and transparent selection process is therefore essential,” he said.
Moazzem said reliable energy supplies would be critical before factories could be brought back into operation.
“I believe the government should adopt a phased approach rather than trying to reopen all the factories at once,” he said, adding that the selection process itself could take more than a year if conducted properly.
“Hopefully, by the time the selection process is complete, the country’s energy situation will have improved to a more acceptable level.”
He also suggested giving preference to investors committed to renewable energy, reducing dependence on the national grid and diesel generators.
“One practical option would be to install rooftop solar systems. Most of these factories are large industrial facilities with extensive rooftop space, making solar energy a practical and feasible solution,” he said.
Moazzem estimated that the entire reopening process could take one to two years, or longer.
Govt pushes solar investment
Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood said the government had adopted an investment-friendly policy to increase private investment in the energy and power sectors.
He said the government remained alert to ensure industries did not suffer and was holding discussions with industrial entrepreneurs, intellectuals and experts to address the energy crisis.
The government has also adopted an aggressive plan to expand solar power generation, he said, adding that a new policy had been formulated within two months.
The policy includes various incentives, including a five-year tax holiday, to attract investment in solar power.
“The government would implement the facilities highlighted in the policy to stop harassment of investors in the solar power sector,” he said.
“It is our desire and I think it is possible that we can achieve our target of 10,000 megawatts,” he added.
He said importance was being given to the OPEX model, particularly for solar generation, while rooftop solar power would gradually be expanded across the country, starting from Dhaka.
