Why H&M is helping Bangladesh build its first offshore wind farm

The electric grid in Bangladesh runs almost entirely on fossil fuels. But a large new wind farm planned off the coast will help speed up the country’s transition to renewable energy. One of the unlikely backers of the project: Swedish clothing giant H&M.

H&M and Bestseller, a Danish clothing brand with more than 2,700 retail stores, are the first investors in the 500-megawatt wind farm. Five to ten other fashion brands with production in Bangladesh may also join.

“We really saw a huge potential to leverage large global fashion brands’ investment in a project that will contribute to the infrastructure of that country,” says Holly Syrett, VP of impact programs and sustainability at Global Fashion Agenda, a nonprofit focused on helping the fashion industry improve social and environmental impact. The group spent a year and a half working on a collective action program for apparel companies that could help add new renewable energy at a large scale.

Bangladesh is a hub for clothing production, with thousands of factories. It isn’t simple for those suppliers to transition to renewable energy. “In Bangladesh, we see a lack of basic infrastructure for enabling electrification, and Bangladesh is heavily dependent on natural gas,” says Ulrika Leverenz, head of green investment at H&M Group. “We also see that the current legislative framework is not supportive enough of the transition towards electrification.” The country’s current law doesn’t allow companies to use power purchase agreements, for example, a model that H&M and its counterparts use in other locations to help build new wind and solar projects.

H&M set up a collective green loan program for suppliers last year, and is helping some of its suppliers in Bangladesh add solar panels and improve energy efficiency. “Suppliers need both financial and technical support to reduce the emissions in the pace required for fashion brands to achieve their science-based targets,” Leverenz says. Still, the company knew that solutions at individual factories alone wouldn’t be enough to meet its goal of sourcing 100% renewable electricity in its supply chain by the end of the decade.

At 500 megawatts (roughly the amount of power used by 90,000 houses annually in the U.S.), the new wind project won’t be able to cover the needs of Bangladesh’s garment industry on its own; five to six times more power generation will be needed. But it will make a difference for the grid—cutting emissions by 725,000 metric tons per year—and the model can be replicated with other clean energy projects, Syrett says. The same approach could be used in other countries with large apparel manufacturing industries, like Vietnam.

The new wind farm in Bangladesh could begin operations by 2028. Copenhagen Infrastructure Partners, a Danish investment firm that specializes in wind power projects, is now working on early-stage development. In the meantime, Global Fashion Agenda and companies like H&M are pushing for policy changes in Bangladesh to help accelerate other clean energy projects.