A government initiative to implement 18 renewable energy projects using private sector funding is yet to make any significant headway.
According to the Renewable Energy Policy, 2008, Bangladesh aims to generate 10% of its total electrical power - or 2,000MW - from renewable energy sources by the year 2020.
The 18 projects identified by Bangladesh Power Development Board (PDB) to help meet this target have a combined generating capacity of 1,050MW, but progress on their implementation has been painfully slow, particularly with regard to solar energy.
“We have notified 18 private sector entrepreneurs on multiple occasions to complete the construction of these power plants and supply the electricity to the national grid,” said Power Division Joint Secretary Mohammad Alauddin, who looks after renewable power projects.
“There are failures - I will not deny it - but we can overcome any hurdle if we are motivated enough.”
The state-owned PDB signed power purchase agreements with five of the private-sector entrepreneurs for projects totalling 302MW in capacity. At the same time, Letters of Intent (Lol) were sent to private investment companies for eight more projects totalling 528MW in capacity.
Proposals for another five projects to meet the rest of the power capacity were made under the Speedy Supply of Power and Energy (Special Provision) Act, 2010 and are currently under consideration by the Proposal Processing Committee of Power Division.
“We are trying to move forward by motivating the solar power companies,” the Power Division joint secretary said of the delays.
“Our primary duty is facilitation and we hold meetings on these issues every two months. We expect that at least two solar power projects will be able to supply electricity to the national grid within the next year.”
A power division official described the performance of the 18 private investors, who are called Independent Power Producers (IPPs), as “not satisfactory” as they had failed to provide any logic or reason behind the situation.
“Usually, a solar power plant requires 3-4 acres of land to generate each megawatt of electricity. However, many [entrepreneurs] are blaming a shortage of land,” the official told the Dhaka Tribune, on condition of anonymity.
“They should have been taken the matter into consideration before signing the projects. Some are even claiming that the tariffs per unit of electricity are too low.”
The government official also claimed that many of the companies involved in the solar power projects lack the financial capacity to implement them.
The companies that signed contracts for solar power production are: Bangladesh and Korea based Haor Bangla-Korea Green Energy Ltd; Singapore and Malaysia based HETAT-DITROLIC-IFDC Solar Consortium; US based Sun Edison Energy Holding (Singapore) Pte Ltd: and the local firms Joules Power Ltd and Intraco Solar Power Ltd.
The state-owned PDB is set to purchase electricity from five power plant projects over a period of 20-25 years. The projects are to be implemented by private sector investors as IPPs.
On March 3, 2016, the Bangladesh arm of Haor Bangla-Korea Green Energy Ltd inked a deal with the PDB to implement a 32MW solar grid power plant project in Sunamganj. The project construction was due for completion within 18 months, but it is still facing delays.
“It is true that we could not supply electricity to the national grid by September 15, 2017 (so) we will compensate the PDB as per the law,” the chairman of Haor Bangla-Korea Green Energy Ltd and member of parliament (Sunamganj-1) Mouazzam Hossain Ratan said.
“The reason behind our failure to move the project forward was an internal dispute with our Korea-based partner company. We have made good progress in our search for new partners. The project can be completed within the next one or two years, if we can find an eligible partner company.”
Separately, the PDB signed a deal with the HETAT-DITROLIC-IFDC Solar Consortium (Singapore-Malaysia) on October 10, 2016 to purchase electricity from a 50MW solar power plant. The firm is yet to complete the construction of the power plant, which was to be set up in Mymensingh.
On January 9, 2017, the PDB signed a 20-year agreement with Sun Edison Energy Holding (Singapore) Pte Ltd, a subsidiary of the US-based SunEdison, to purchase electricity. The deal was inked for a 200MW solar power plant to be set up at Teknaf in Cox’s Bazar but construction of the power plant is yet to begin.
Speaking about the delays, Consulting Director (Business Development) of SunEdison, Mohammad Rab, told the Dhaka Tribune that there were some hurdles regarding land acquisition and financing.
“This is a major project and in Bangladesh, these sorts of projects face many hurdles during the implementation phase,” he said. “But we have successfully overcome the problems (and) we will start working on the project from this month.”
The PDB signed an agreement with Joules Power Ltd on February 9, 2017 to purchase electricity from a 20MW solar power plant to be built at Teknaf in Cox’s Bazar.
On August 27, 2017, the PDB signed another 20-year power purchase agreement with local private company Intraco Solar Power Ltd.
Among the eight companies that received the Letter of Intent, only the Beximco Power company Ltd has plans for a 200MW solar power plant in Gaibandha and a 30MW power plant in Panchagargh.
However, the Beximco Power company Ltd is yet to sign an agreement while the situation is similar among the other seven companies.
“We expect to sign an agreement to construct a 200MW solar power plant in Gaibandha this month. Land development has already been completed and we are ready to start construction once the agreement is signed,” said M Rafiqul Islam, who is executive director of these two power plants.
“Signing an agreement for a 30MW power plant in Panchagargh may take several more months. However, we expect that the power can be included in national grid relatively early,” he said.
There has been at least one success in the government’s solar energy plan. A project run by a private solar power company added 3MW of generating capacity to the national power grid on August 3 this year, in a first for Bangladesh.
The 3MW power plant was constructed on eight acres of land at Sarishabari in Jamalpur by a local company named Engreen Sarishabari Solar Plant Ltd, under a ‘build, own and operate’ agreement.
The plant is now supplying power to the PDB-owned Sarishabari 33/11 kV sub-station at the rate of 0.1897 US cents per unit, equivalent to Tk14.74.