Energy, banking and law and order investors’ top concerns
Bangladesh’s investment challenge rests on energy, finance and stability
Bdbusinessdaily.com – Bangladesh’s newly consolidated investment body, Invest Bangladesh, has begun work with a clear message for businesses: navigating government services should become simpler, but a stronger investment climate will require far more than a new agency.
Created less than two months ago through the merger of three agencies, Invest Bangladesh is intended to reduce fragmentation in investor support. The consolidation followed repeated concerns from business associations, which argued that the country had too many institutions promoting investment and too little clarity about where investors should seek information or services.
A global review found that Bangladesh’s previous arrangement was unusual internationally. Investors could be forced to approach multiple offices while trying to resolve a single matter. The revised framework aims to create one point of contact and remove overlapping channels.
“Consolidating them was their own demand,” the agency’s leadership has said, describing the change as a response to concerns raised by investors.
A single digital gateway
The new legal framework requires a unified digital platform for investment-related services. Once that platform is operational, competing channels will not be permitted to provide the same service. The intention is not merely to put existing paperwork online; it is to end the parallel manual process that can produce unequal treatment.
That distinction matters. If a business can obtain a trade licence digitally but can also secure it through an in-person route after making an informal payment, an online system alone does not create fairness. Closing the manual alternative is meant to ensure that investors face the same procedures, timelines and requirements.
Still, smoother administration will not automatically reverse weak investment flows. Slowing growth has been linked in part to insufficient investment, yet investment promotion agencies cannot solve every obstacle facing businesses. A low level of investment is better understood as the result of deeper problems, rather than the root cause itself.
Energy and banking remain the biggest obstacles
Two constraints stand out: dependable energy supply and the health of the banking sector. A manufacturer may see opportunity in Bangladesh, but a factory cannot operate reliably without access to gas and other essential utilities. Investors need confidence that basic infrastructure will be available when production begins.
The financial system presents an equally serious concern. Businesses require credit, while lenders and investors need confidence in banks and financial markets. Bangladesh’s non-performing loan ratio is now estimated at about 33%. The central bank governor has proposed allocating Tk60,000 crore annually for between five and eight years to keep troubled banks functioning, underlining the scale of the challenge.
For a prospective investor, these issues are closely connected. Energy shortages can delay operations and raise costs. Fragile banks can restrict access to financing, weaken payment confidence and make long-term planning more difficult. A streamlined investment office may help a company submit applications, but it cannot by itself guarantee gas supply or restore confidence in distressed financial institutions.
Governance indicators offer a difficult comparison
Governance is another major factor in the investment decision. The World Bank’s Worldwide Governance Indicators, released in recent weeks, assess six areas on a scale of 100. Bangladesh’s 2025 scores included 28 for control of corruption, 39 for regulatory quality, low-40s results for government effectiveness and rule of law, and 44 for voice and accountability.
Within South Asia, Bangladesh ranked above Afghanistan and Pakistan on this overall comparison, while India, Bhutan, Sri Lanka and Nepal were ahead. The contrast with Singapore is particularly sharp: Singapore’s government effectiveness score stands at 95.
The immediate competitive benchmark, however, is not necessarily Singapore. Bangladesh is competing for projects with economies such as Vietnam and the Philippines. Investors often choose among countries that offer similar production opportunities, labour markets or regional access. In that contest, a country must demonstrate both the opportunity itself and a credible path of improvement.
“If my score is 43 today, 45 next year and 47 the year after, his confidence grows.”
That gradual improvement can matter because investment decisions are forward-looking. Businesses do not only evaluate current conditions; they consider whether policy, regulation and public services are moving in a reliable direction. Even an imperfect environment can attract capital if investors believe reforms are durable and measurable.
FDI figures heighten the urgency
Bangladesh received $1.78 billion in foreign direct investment in 2025, placing it behind Uganda, Ghana, Congo and Pakistan. Uganda recorded $3.36 billion. The figures reinforce concerns that Bangladesh is not converting its economic potential into investment at the expected scale.
The country still has opportunities that experienced investors can identify. Those who examine Bangladesh closely understand its potential. The more persistent problem is the inability to consistently deliver fundamentals that businesses expect: clear administration, reliable infrastructure, access to finance, stable rules and confidence in public institutions.
Political conditions also influence the investment climate. Political and policy stability are central concerns for investors because major projects require years of planning, construction and operation. Investment policy affects businesses regardless of which political party is in power, making it an issue with broad national consequences rather than a matter for partisan competition.
Energy availability, banking-sector confidence and law-and-order conditions are among the concerns raised most frequently by investors. Addressing these issues will demand action across government, regulators, utilities, banks and the wider business environment. Invest Bangladesh can make the investor journey easier, but lasting gains will depend on whether the broader system becomes more dependable.
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