Infrastructure & PPPs in Bangladesh and Sri Lanka - Q2 2026 Update

YOG INFRA
10 hours ago
14 min read

BANGLADESH and SRI LANKA are advancing renewable energy, transport, and strategic infrastructure projects, strengthening energy security, connectivity, and economic resilience. BANGLADESH is progressing USD 2.72 Bn in PPP bridge projects, a USD 200 Mn 442 MW solar plant, multiple solar tenders, and USD 428 Mn in ADB and JICA financing, alongside renewable energy reforms and international partnerships. SRI LANKA is advancing a USD 2 Bn Colombo Port expansion, its first 100 MW utility-scale solar project, USD 57 Mn in ADB rooftop solar financing, PPP reforms for Sri Lankan Airlines, and partnerships to strengthen digital infrastructure, logistics, and private investment.

Read more about key developments in Infrastructure and PPPs in the four countries in our Q2 2026 insight.

BANGLADESH

BANGLADESH, UK SIGN MOU TO BOOST IN AVIATION COOPERATION

The United Kingdom and Bangladesh established an aviation sector partnership through a Memorandum of Understanding (MoU), which serves as a major advancement for their economic relationship. The agreement focuses on Public-Private Partnerships (PPPs), which the agreement establishes as a means to increase investment and develop environmentally friendly aviation infrastructure.

The MoU establishes various areas, which include investment facilitation and knowledge sharing and capacity building and enhanced private sector participation as shared areas of collaboration between the two parties.

The agreement demonstrates their common goal to create an aviation system which enables trade and tourism development while driving overall economic expansion. Both nations expressed optimism about the future impact of the agreement, stating that it will open doors for new investments, create employment opportunities, and strengthen business ties.

The initiative also signals Bangladesh’s readiness to attract global investors and expand its economic engagement with the UK. The MoU will enable better collaboration between the two countries, which will extend beyond their aviation partnership.

GOVT PLANS TWO MAJOR BRIDGES OVER MEGHNA UNDER PPP

The government has moved to build two major bridges over the Meghna River system under a Public-Private Partnership (PPP) model, aiming to improve interdistrict connectivity. The planned projects include a 10.86km bridge linking Barishal and Bhola districts and an 8 km bridge over the Meghna connecting Chandpur and Shariatpur.

The proposed Barishal-Bhola bridge will be more than twice the length of the Jamuna Bridge. The project is estimated to cost Tk 17,466 Cr (USD 1.42 Bn), which is considerably lower than the cost of constructing the Padma Bridge. Meanwhile, the proposed bridge over the Meghna River on the Shariatpur-Chandpur route will be nearly double the length of the Jamuna Bridge and is estimated to cost Tk 15,957 Cr (USD 1.30 Bn).

The Bridges Division has submitted a proposal seeking in-principal approval from the Cabinet Committee on Economic Affairs to implement the projects under the PPP model. If approved, the division will move forward with detailed planning and begin searching for domestic and international partners to implement the projects.

ADB APPROVES USD 115.8 MN LOAN TO ENHANCE WATER AND RESILIENT URBAN SERVICES IN BANGLADESH

The Asian Development Bank (ADB) has approved a USD 115.8 Mn loan to strengthen environmentally sustainable and climate-resilient urban services in Narayanganj City Corporation (NCC), Bangladesh. The initiative will support infrastructure improvements in a key urban centre while contributing to broader efforts to ease pressure on Dhaka.

The Narayanganj Green and Resilient Urban Development Project will focus on upgrading drinking water supply systems, modernising drainage networks, and expanding access to green public spaces. It also includes measures to enhance institutional capacity within NCC and local communities. The project is expected to benefit at least 400,000 residents and improve service delivery in the city.

A central component of the project is improving water supply efficiency and reliability. Non-revenue water is expected to decrease to below 20% through the replacement and expansion of around 230 kilometres of pipeline network alongside the installation of metered household connections and the introduction of district-metered area systems. Digital tools, including supervisory control and data acquisition systems, will also be deployed, together with upgrades to billing and revenue collection processes.

Water production capacity in NCC is projected to increase from 113 million litres per day to 162 million litres per day through new tube wells, rehabilitation of the existing treatment plant, and upgrades to current wells. The project also includes the development of 22 kilometres of drainage infrastructure using nature-based solutions to reduce flooding, strengthen climate resilience, and support groundwater recharge.

BANGLADESH PLANS 442 MW SOLAR FACILITY NEAR COAL POWER PLANT

The Bangladesh Power Development Board (BPDB) is planning to develop a 442 MW solar power plant near the 1.32 GW coal-fired Rampal Power Station, which is currently under construction at Rampal Upazila of Bagerhat District in Khulna, in the southwestern part of the country.

Around USD 200 Mn will be invested to build what is expected to be the country’s largest solar installation, covering approximately 685 acres. BPDB will finance around 15% of the project cost from its own funds, with the remaining 85% to be sourced from the government’s Power Development Fund.

Construction costs at the Rampal site are expected to be lower than those of a 220 MW solar project in Sonagazi. As a result, the proposed power purchase tariff is also lower, with electricity from the Rampal plant being priced at USD 0.050/kWh, compared with USD 0.072/kWh for the Sonagazi facility.

A 230 kV double-circuit transmission line will be built to connect the solar plant to the nearest substation operated by Bangladesh-India Friendship Power Company Limited, located 1.5 km from the site.

BANGLADESH LAUNCHES 495 MW SOLAR TENDER

The Bangladesh Power Development Board (BPDB) has launched a tender for the construction of 495 MW of grid-tied solar power capacity across 9 locations in Bangladesh. The proposed solar plants will have capacities ranging from 25 MW to 100 MW. The projects are planned in Kishoreganj, Chattogram, Kurigram, Mymensingh, Cox’s Bazar, Panchagarh, Lalmonirhat, Netrokona, and Tangail districts.

The plants will be developed near existing substations in nine districts as part of the government’s plan to reach 10,000 MW of renewable energy capacity by 2030. The bidders themselves will buy land for the plants, and the bidders will also propose the tariff at which they are willing to sell electricity to BPDB. The government will not provide land or other development support and that the projects will be fully privately financed.

BANGLADESH LAUNCHES TENDERS FOR 77.6 MW OF SOLAR

The Bangladesh Power Development Board (BPDB) has issued tenders for three solar power plants in the districts of Chittagong, Rangamati, and Dinajpur, with a combined capacity of 77.6 MW. The projects include a 50 MW plant in Chittagong, a 7.6 MW installation in Rangamati, and a 20 MW facility to be built on land at a coal field in Dinajpur.

BPDB has invited international developers to develop the projects using its own funds and foreign currency resources from the Power Sector Development Fund. All three grid-connected solar photovoltaic plants will be developed on a turnkey basis. Selected bidders will be responsible for design, engineering, manufacturing, supply, installation, testing, and commissioning.

The 20 MW plant will be located at the Barapukuria coal-fired thermal power plant site. The government aims to complete the project within one year. The 7.6 MW facility will be installed at the Karnafuli Hydropower Station in Rangamati, also with a targeted completion timeline of one year after contract award. The 50 MW plant will be developed in the Rangunia subdistrict of Chittagong, with completion expected within 18 months of contract award.

BANGLADESH OPENS PUBLIC LAND TO UTILITY-SCALE SOLAR UNDER PPP MODEL

The government of Bangladesh has introduced a Public–Private Partnership (PPP) framework for developing solar energy projects on land owned by public agencies, aiming to boost green power generation amid ongoing energy shocks. The Power Division unveiled the policy framework titled “Guidelines for Development of Renewable Energy Projects Using Land Owned by Government Agencies under PPP Modality."

Under the new model, public land will be made available to private investors for utility-scale renewable energy projects, with the Bangladesh Power Development Board (BPDB) acting as the contracting authority. The government issued these guidelines aiming to facilitate the utilization of unused or underutilized public land for renewable energy deployment while ensuring transparency, competitive procurement, and institutional coordination under the PPP framework.

The framework brings together key stakeholders, including Power Grid, the PPP Authority, and project developers, under a structured implementation process. A Government Facilitation Agreement (GFA) has been proposed to support project bankability. The framework aims to accelerate the transition toward clean and sustainable power generation in line with the Renewable Energy Policy 2025.

One of the key barriers for such projects has been access to suitable land and the time required to reach a ready-to-build stage. The new PPP guideline, where government agencies facilitate land, is therefore a highly impactful step.

BANGLADESH, UNDP LAUNCH INITIATIVE TO ACCELERATE LOW-CARBON URBAN DEVELOPMENT

The Sustainable and Renewable Energy Development Authority (SREDA) together with the United Nations Development Programme (UNDP) launched a new initiative to support Bangladesh’s transition toward a more sustainable, energy-efficient, and climate-resilient urban development. The five-year initiative, titled ‘Promoting Energy-Related Low Carbon Urban Development (LCUD) in Bangladesh,’ is supported by a USD 3.7 Mn grant from the Global Environment Facility (GEF).

The project will promote renewable energy adoption, energy-efficient infrastructure, and low-carbon urban planning solutions to help reduce greenhouse gas emissions in Bangladesh’s rapidly growing cities, through development of investment grade projects, interaction between public and private stakeholder and awareness raising among city dwellers.

With rapid urbanization increasing pressure on energy systems and the environment, the LCUD project aims to support a more sustainable and low-carbon future for Bangladesh’s cities. The initiative will promote investments in energy-efficient buildings, rooftop solar power, and waste-to-energy solutions in key urban areas, including Dhaka and Chittagong. The project is expected to reduce more than 1.5 million tonnes of greenhouse gas emissions over its lifetime while contributing to Bangladesh’s national climate goals.

BANGLADESH, JICA SIGN USD 312 MN LOAN AGREEMENT TO BOOST ENERGY SECURITY AND ECONOMIC RESILIENCE

Bangladesh and the Japan International Cooperation Agency (JICA) have signed a loan agreement worth JPY 50 Bn (USD 312 Mn) to support the country's economic resilience and strengthen energy security amid growing global and regional uncertainties.

Under the agreement, JICA will provide a Development Policy Loan aimed at helping Bangladesh enhance its economic management capabilities and strengthen the resilience of its energy sector. The program marks the first Official Development Assistance (ODA) loan initiative under the Partnership on Wide Energy and Resources Resilience Asia (POWERR Asia), a Japanese framework designed to address energy supply vulnerabilities and supply chain disruptions across the region.

The program is built around two key pillars: strengthening energy resilience and improving economic management and governance. Under the energy component, the initiative will support policy reforms focused on diversifying energy sources, improving energy efficiency and ensuring a stable supply of power.

The program is expected to contribute to the sustainability of high-efficiency power generation facilities, strengthen grid planning and promote energy conservation measures. The second component will focus on economic governance and management reforms and will be implemented in collaboration with the Asian Development Bank (ADB) through co-financing arrangements. The initiative is also expected to further strengthen bilateral cooperation and contribute to Bangladesh’s long-term goal of achieving resilient and sustainable economic growth.

BANGLADESH AND GERMANY SIGN MOU TO STRENGTHEN RENEWABLE ENERGY TRAINING

Bangladesh and Germany have signed a Memorandum of Understanding (MoU) in Dhaka to launch a EUR 5 Mn (USD 5.8 Mn) grant-backed project to modernise technical and vocational education in the renewable energy sector. The Technical and Madrasah Education Division (TMED) will implement the project, with financial support from GIZ, Germany's development agency.

The Directorate of Technical Education (DTE) and the Bangladesh Technical Education Board (BTEB) will implement the TVET4RE project under TMED from 1 July 2025 to 30 June 2028. The initiative aims to strengthen and modernise Bangladesh's Technical and Vocational Education and Training (TVET) system, aligning it with the evolving labour market in the sustainable energy sector.

BANGLADESH INTRODUCES 0% TAX RATE FOR SOLAR POWER SECTOR

The government of Bangladesh announced a major policy package to accelerate solar power development, including a 0% tax rate for the solar power sector until 2035. In addition, a 5% tax rebate will be provided on payments made against consumers’ solar electricity bills.

The initiative aims to attract investment into the solar power sector as part of the government’s plan to generate 20% of total electricity demand from renewable energy sources by 2030 and between 30% and 50% from clean energy by 2050.

The items such as solar inverters, battery pack housing, lithium cells, lithium-ion batteries, solar photovoltaic modules/panels, mounting structures, battery energy storage systems (BESS), battery management systems, UV-protected solar DC cables, and battery thermal management systems will benefit from the duty and tax exemptions. Bangladesh currently has a renewable energy generation capacity of 1,797 MW, of which 1,504 MW comes from solar power.

SRILANKA

SRI LANKA AND WORLD BANK GROUP LAUNCH NEW PARTNERSHIP TO CREATE JOBS, ATTRACT PRIVATE INVESTMENT

The Government of Sri Lanka and the World Bank Group have launched a new partnership aimed at generating jobs and attracting private investment to support the country’s economic recovery. The initiative focuses on strengthening key sectors and improving the business environment to encourage sustainable growth. The partnership comes at a crucial time as Sri Lanka continues to rebuild its economy following financial challenges.

Key areas of focus include enhancing infrastructure, improving regulatory frameworks, and supporting industries with high growth potential. The World Bank Group will provide financial assistance, technical expertise, and policy support to help implement these reforms effectively.

Attracting private investment is essential for long-term economic stability. The collaboration is expected to boost investor confidence and promote innovation across sectors such as manufacturing, services, and technology.

This partnership reflects a broader commitment to inclusive growth, ensuring that economic recovery benefits all sections of society. By aligning policy reforms with investment opportunities, Sri Lanka aims to build a resilient economy capable of sustaining growth and generating employment in the years ahead.

IFC PARTNERS WINDFORCE TO DEVELOP SRI LANKA'S FIRST UTILITY-SCALE SOLAR POWER PROJECT

The International Finance Corporation (IFC), a member of the World Bank Group, has announced a partnership with WindForce PLC to develop Sri Lanka's first utility-scale 100-megawatt (MW) solar power facility, a project that will accelerate the country's energy transition, strengthen energy security, lower electricity costs and create thousands of jobs.

The project will generate around 220 gigawatt-hours (GWh) of clean electricity each year, advancing Sri Lanka's goal of increasing renewables to 50-70% of the power mix by 2030. It will strengthen grid reliability, lower costs for electricity consumers, and create more than 3,000 jobs, including skilled and semi-skilled employment that builds capacity in renewable energy and infrastructure sectors.

IFC is investing up to USD 18 Mn through a local-currency loan, supported by the IDA21 Private Sector Window (IDA PSW) Local Currency Facility, in WindForce-Sri Lanka's leading renewable energy company-to finance the solar power plant and related infrastructure. This also enables future utility-scale battery storage and renewable projects, helping strengthen grid stability.

Beyond financing, IFC will deliver targeted advisory support to strengthen WindForce's technical and operational capacity, spanning engineering, procurement, maintenance, sustainability, grid resilience and cybersecurity.

Aligned with the World Bank Group's programmatic approach to scaling renewable energy, a key priority under the World Bank Group Country Partnership Framework for Sri Lanka-the partnership blends private capital with market creation to strengthen grid resilience, accelerate the integration of variable renewable energy and support macroeconomic recovery by reducing reliance on imported fuel and enhancing energy security. The project complements Phase I of the World Bank's Secure, Affordable and Sustainable Energy Programme, which includes a USD 30 Mn IDA credit to strengthen transmission infrastructure and institutional capacity for renewable energy integration.

ADB APPROVES USD 57 MN FOR SRI LANKA ROOFTOP SOLAR AGGREGATION PROJECT

The Asian Development Bank (ADB) has approved a USD 57.4 Mn financing package for a solar aggregation and virtual net metering project in Sri Lanka.

The project will support two government-owned utilities in establishing a utility-led rooftop solar aggregation and virtual net metering model that pools electricity from large rooftop solar installations and virtually distributes credits to eligible consumers. It will involve the installation of about 25 MWp of rooftop solar capacity. The project will also help modernise and digitalise the distribution networks of the two utilities.

The project aims to lower electricity costs for eligible micro, small and medium-sized enterprises and community organisations, including such unable to install rooftop solar, through allocations under a social compensation mechanism.

The financing comprises a USD-35-Mn concessional loan, grants of USD 16.9 Mn from the EU and USD 5.5 Mn from the Japan Fund for the Joint Crediting Mechanism.

SRI LANKAN SEEKS USD 29.80 MN AS GOVT MOVES TO PPP MODEL

Sri Lanka’s Government is moving forward with plans to introduce a Public-Private Partnership (PPP) model for SriLankan Airlines, acknowledging that maintaining the national carrier solely through taxpayer funding has become increasingly unsustainable.

The Government is currently expected to provide approximately LKR 90 Bn (USD 268.43 Mn) in financial support to keep the airline operational through 2030, averaging nearly LKR 30 Bn (USD 89.40 Mn) annually. In addition, SriLankan Airlines has requested a further LKR 10 Bn (USD 29.80 Mn) to sustain its operations.

The Government stated that this level of public funding cannot continue indefinitely, noting that it is unfair for taxpayers—including those who have never used air travel—to bear the financial burden of maintaining the airline.

To address the issue, the Government has decided to pursue a PPP model and is preparing investment proposals to invite private investors. A dedicated institution will oversee the investor selection process, with the Government expressing confidence that investments can be secured within this year.

The Government also clarified that it does not intend to fully privatize SriLankan Airlines. Instead, it plans to retain a level of State ownership, emphasizing that maintaining a national carrier is important for responding to emergencies and safeguarding strategic national interests.

SRI LANKA AND VIETNAM DISCUSS DIGITAL PUBLIC INFRASTRUCTURE AND AI COOPERATION

The Governments of Sri Lanka and Vietnam held discussions on expanding cooperation in digital public infrastructure, artificial intelligence and digital economy development

The discussions covered potential collaboration in AI infrastructure, public sector digitalization and digital skills development. Vietnam also expressed interest in investing in Sri Lanka’s data centre sector as part of broader digital economy cooperation. Both countries additionally explored strengthening the existing memorandum of understanding between Sri Lanka Association for Software and Services Companies (SLASSCOM) and Vietnam’s VINASA association, including collaboration with Hanoi’s technology and innovation ecosystem.

Sri Lanka outlined its objective of becoming a regional digital hub by 2030, targeting a digital economy valued at USD 15 Bn and digital exports worth USD 5 Bn. Officials from both countries highlighted the importance of knowledge exchange, policy reforms and practical partnerships to support digital transformation initiatives and strengthen digital connectivity across the region.

COLOMBO PORT EXPANSION PLANS GATHER PACE WITH USD 2 BN PIPELINE

The Sri Lanka Ports Authority (SLPA) has unveiled an ambitious investment pipeline of up to USD 2 Bn over the next one to three years to strengthen the country's maritime and logistics sector.

The announcement comes amid increasing volatility in global trade. Recent tariff disruptions and supply chain interruptions, particularly in the Red Sea and Suez Canal, have reportedly cost the global economy around USD 450 Bn in the short term. These disruptions have forced shipping lines to adopt alternative routes, significantly affecting Sri Lankan exports, including tea shipments to the Middle East. As a result, freight rates among five major shipping lines declined by 25% in Q1 2026 compared to the same period in 2025. The situation highlights the need for more resilient supply chain solutions, especially as the world's ten largest shipping lines now control 84% of global shipping capacity, representing 27.9 million Twenty-foot Equivalent Units (TEUs).

To remain competitive and attract global operators, Sri Lanka must address the growing capacity constraints at the Port of Colombo. The port handled 8.3 million TEUs in 2025, ranking among the world's top 25 container ports and the top 15 globally for connectivity. With a maximum handling capacity of 10 million TEUs and demand rising to 9.3 million TEUs, capacity utilisation has exceeded 70%, creating operational bottlenecks and increasing vessel waiting times.

The urgency is further underscored by a 22% year-on-year growth in cargo volumes recorded in April 2026. To ease capacity constraints, the commissioning of the East Container Terminal next year is expected to increase the Port of Colombo's total capacity to 14 million TEUs, against projected demand of 10.5 million TEUs. In addition, the Port of Hambantota will contribute a further 2 million TEUs of handling capacity.

As part of the USD 2 billion investment strategy, the SLPA plans to invite Expressions of Interest (EOIs) before the end of 2026 for the development of a dedicated logistics hub on a 14-acre site within the Port of Colombo. The facility will be connected to the airport through a new elevated highway, reducing sea-air cargo transit time to approximately 30 minutes and strengthening Sri Lanka's position as a regional logistics hub.

SRI LANKA AND RUSSIA AGREE TO RAILWAY INFRASTRUCTURE COOPERATION MOU

Sri Lanka and Russia have signed a Memorandum of Understanding (MoU) to enhance cooperation in the transport sector, focusing on staff training, capacity building, and knowledge exchange. The agreement was signed on the sidelines of the International Transport and Logistics Forum held in Saint Petersburg. The MoU is expected to strengthen bilateral ties, creating new opportunities in human resource development, professional training, and institutional capacity building.

During bilateral talks between the two countries, special attention was given to railway sector cooperation, including potential Russian involvement in modernizing Sri Lanka’s railway infrastructure, such as the Kelani Valley railway line. Both sides also discussed expanding air connectivity, noting a steady increase in passenger traffic between the two countries.

List of key transactions - Bangladesh and Sri Lanka Q2-2026

Source: YOG INFRA analysis

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