A high-level Swedish delegation yesterday praised the green transformation of Bangladesh’s readymade garment sector and underscored the need of the establishment of Corporate Power Purchasing Agreements (CPPAs).

CPPAs is a strategic, contractual solution for corporate entities to procure electricity from external renewable energy sources. CPPAs are a promising mechanism for corporate actors to procure renewable energy and meet sustainability goals, while mitigating other long-term risks in the procurement of grid electricity.

The agreements allow corporations to procure renewable energy directly from producers, over a specified period of time and at a fixed price.

Furthermore, CPPAs offer companies the ability to credibly specify where and how the energy used in their supply chains is produced (traceability), increasing their ability to comply with international regulations.

A policy dialogue on CPPAs moderated by the Swedish Ambassador to Bangladesh Alexandra Berg von Linde was arranged at the Swedish embassy in Dhaka. Bangladesh’s State Minister for Power, Energy and Mineral Nasrul Hamid and Swedish Minister of Foreign Trade and International Development Cooperation Johan Forssell took part in the dialouge.

The Swedish  minister said “the RMG sector in Bangladesh is of high strategic and economic importance for both of our countries” and that Sweden was ready to support and partner up with Bangladesh in the green transition of the RMG-sector.

He also spoke of the long and friendly relationship between Sweden and Bangladesh and how the area of sustainability would be a central element in the relations going forward. Minister Forssell recently visited Bangladesh together with Her Royal Highness, Crown

Princess Victoria of Sweden, and the green and digital transition was one of the overarching themes of the visit.

During his visit, the Minister visited a factory to observe the progress on transitioning to green and resource efficient production technologies within the RMG-sector.

Nasrul Hamid emphasized that ensuring sustainability and decarbonization in the apparel industry has become an existential issue for Bangladesh. “In times such as these, we need to work together in bringing solutions and working proactively, rather reactively,” said the State Minister.

Both parties agreed that strategic collaborations like CPPAs on renewable energy in the RMG-sector has the potential to make Bangladesh more business competitive globally - and at the same time respond to for instance EU-legislations on environmental standards and due diligence.

Hence, enabling a CPPAs framework to increase availability of renewable energy for the RMG and textile industry can be a catalyst for sectoral growth, they say.