The Centre for Policy Dialogue (CPD) has urged the government to reconsider 37 solar project agreement cancellations, signed during the previous Awami League government, due to political considerations and allegations of irregularities.
The recommendation came during a seminar titled “Recent Challenges for Chinese Overseas Investment in Bangladesh’s Renewable Energy Sector: Way Forward”, held at a hotel in Dhaka on Monday. The event was organized by CPD and the Bangladesh-China Renewable Energy Forum.
At the same time, CPD urged the government to ensure adequate facilities to increase investment in the renewable energy sector.
CPD Research Director Khondaker Golam Moazzem and Abrar Ahmmed presented the keynote report at the event.
The report highlighted that China accounts for 50% of foreign investment in renewable energy.
But, it said, the interim government has cancelled the construction of 37 solar power plants with a capacity of more than 3,287 megawatts undertaken by the previous Awami League regime due to political considerations and allegations of irregularities.
Of these projects, funded by 14 countries, China has four, Singapore has seven, and India and the United States have one each. They are investing more than $6 billion. $300 million has already been spent. Of these, 15 companies have purchased land and paid taxes to the government, the report noted.
In this situation, Chinese investors said that they are concerned about the government's decision to cancel the 37 Solar project.
They said they want a solution as they have invested a lot.
Although the government has formed a committee to review the cancelled projects and find any irregularities or corruption, the authority of the committee is still under question, the report said.
The report also highlighted various problems, including the slow pace of investment in the renewable energy sector, lack of land, and lack of transparency.
The report highlighted the problems facing Chinese investment in this sector and called for the country to introduce a one-stop service and simplify the investment process.
Researcher Abrar Ahmmed said that BPDB (Bangladesh Power Development Board) follows an open tender and transparent process. "However, several operational and structural problems still remain."
He added: “The investment process in renewable energy is partly paper-based. This increases the risk of administrative delays and errors. Foreign investors face problems with local offices. In addition, such investments require a long and multi-level approval process.”
He also said: “After technical evaluation, the proposals have to move through BPDB, ministries, Cabinet Committee on Public Procurement. This extended clearance period discourages major investors.”
He further added: “While in India, these implementations take three to four months, in Bangladesh, it takes more than a year. This creates financial risks. Various types of documents, multiple license certificates and obstacles to access to information are major challenges for renewable investments.”
The report recommends digitalization, avoiding repeated changes to the policy process, ensuring legal transparency, and guiding investors to make investment in renewable energy easier.
CPD Research Director Khondaker Golam Moazzem said: "Bida (Bangladesh Investment Development Authority) must come forward to solve these problems. Bida can play the role of a coordinator to ensure all the benefits of the investment.”
He added: “This will save time as well as money. The government must work to resolve the complexity of multiple licenses.”
Speaking at the event, Chinese Enterprises Association in Bangladesh President Ha Kun said that about 55% of Chinese investment in Asia is in the renewable energy sector and that there is also a significant investment in Bangladesh.
He added: “Bangladesh's target of generating 20% of its total electricity from renewable energy by 2030 is ambitious. We think the government will reconsider it.”
Chairman of the Bangladesh Energy Regulatory Commission Jalal Ahmed said: “Energy is an important sector for our country. We have set a priority also. We are aware that energy empowers the master plan and also working on renewable energy.”
He added: “In 2030, we can produce 30% energy from the renewable energy sector. Now we are working on this sector and trying to make a proper plan. We are working on issues of the cancelled deals and keep in mind the recommendations we received from the investors.”
Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association (BSREA), said: “We are focusing on renewable energy policy and guidelines. Policies have already been approved. Still, we have lots of shortcomings, but we are trying to overcome these issues."
Gobinda Chandra Laha, chief engineer of Bangladesh Power Development Board, said: "The Bangladesh government is giving importance to the renewable energy system. In this regard, policies have already been decided on this energy system. But there are also several problems. We hope to get over it soon."
