In addition to the 10 projects already in consideration, the Power Division is exploring the possibility of establishing several more solar power plants following the NBR's notification reinstating tax exemptions for private investments.
Power Division officials said it is now certain the number of solar projects is going to be increased from the existing 10 proposed plants.
Earlier, the Power Division had planned to set up 10 solar power plants in the private sector and sought the Finance Ministry’s concurrence for National Board of Revenue (NBR) to reinstate the tax holiday on private investment.
Each of the proposed plant was supposed to be 50MW with a total capacity of 500MW.
“Finally, we have received the NBR notification in this regard and now the number of solar plants will be more than 10,” said Energy and Power Adviser to the interim government, Dr Muhammad Fouzul Kabir Khan.
However, the total number of proposed plants has not yet been determined, he said.
Power Division officials said the number of solar plants might be between 30-40.
As per the NBR circular, issued on October 27, the private investors in renewable energy will get a 10-year tax exemption on their investments.
The circular said that companies launching commercial operations of renewable energy-based power generation projects on a Build-Own-Operate basis under Bangladesh’s Private Sector Power Generation Policy between July 1, 2025, and June 30, 2035, will be eligible for a 10-year tax holiday.
“These companies will get 100 percent tax exemption for the first 5 years, 50 percent for the next 3 years and 25 percent for the remaining 2 years”, said the NBR notification.
The tax incentive to provide the benefits over a ten-year period was designed to support long-term growth and development of renewable energy projects, the circular added.
Earlier, the government had withdrawn these exemptions through a gazette notification issued on June 26, 2023, saying that companies which achieve their commercial operation date (COD) between January 1, 2023 and June 30, 2024, will get tax exemptions.
Under the terms of the previous gazette, private power generation companies—excluding coal-fired plants—are eligible for various tax exemptions.
As outlined in the previous NBR notification, private power generation companies will enjoy a 100 per cent income tax exemption until 30 June 2036, limited to income derived from power generation activities.
Additionally, foreign personnel employed by these companies will be exempt from income tax for three years following their arrival in Bangladesh.