Bangladesh is progressing with its inaugural solar power project based on a public-private partnership (PPP) in a designated special economic zone. This initiative comes as the government aims to alleviate the strain caused by expensive fuel imports and entice private investments into sustainable energy sources.
The proposed project, situated in Sonagazi, Feni, is designed to produce 130-140 megawatts (MW) of solar electricity tied to the grid, complemented by battery storage facilities spanning 412 acres of land owned by the Bangladesh Economic Zones Authority (Beza). At a recent workshop in Dhaka, officials presented the project, with attendees including representatives from the power division, Bangladesh Power Development Board (BPDB), Power Grid Bangladesh PLC (PGCB), development partners, and private investors.
During a workshop visit to the project site on the same day, Power, Energy, and Mineral Resources Minister Iqbal Hassan Mahmood mentioned that a solar sector-friendly policy could be announced by the government as early as June. He expressed optimism that the renewable energy industry could mirror the growth witnessed in Bangladesh’s garment sector. Mahmood emphasized the government’s role as a facilitator, intending to support profitable business ventures in the sector by promptly formulating an investment-friendly policy.
Minister Mahmood also hinted at potential tax exemptions on essential solar components to reduce operational costs, enhance storage capacity, and promote the solar energy sector. The State Minister of the ministry, Aninda Islam Amit, highlighted the necessity for Bangladesh to transition towards a more diversified power generation mix. He stressed that while imported fuel will remain relevant, overreliance on external energy sources exposes the nation to price fluctuations, foreign exchange constraints, and fiscal challenges.
The Sonagazi project, hosted at the National Special Economic Zone, signifies a crucial milestone as Beza-owned land is leveraged for eco-friendly energy production. The project’s framework involves key stakeholders such as Beza, BPDB, PGCB, Power Division, Sustainable and Renewable Energy Development Authority (Sreda), and Public-Private Partnership Authority (PPPA), each playing integral roles in the project’s progression.
This endeavor is timely as Bangladesh grapples with enhancing renewable energy capacity amidst persistent policy commitments and escalating reliance on imported fossil fuels, straining foreign reserves and increasing subsidy obligations. Officials anticipate the Sonagazi project to serve as a pioneering model for utilizing idle government land to attract private investments.
Beza’s Executive Chairman, Ashik Chowdhury, disclosed plans to kickstart procurement procedures for the project by August this year. Under the arrangement, BPDB will oversee contracting and purchasing the electricity generated by the plant. The government’s recent approval of new guidelines on April 7 for developing renewable energy projects under the PPP model on public land, coupled with policy endorsement from the Advisory Committee on Economic Affairs in March last year, underscores the project’s solid foundation.
To further bolster the project, the Asian Development Bank (ADB) will lend support for feasibility studies, financial modeling, environmental impact assessments, and assisting in selecting a private partner through international competitive bidding.