Home ›› 29 Apr 2023 ›› Front
Most of the renewable energy (RE) based power projects of Bangladesh are still stuck in their initial stage even though the deadlines for their Commercial Operation Dates (COD) have long passed.
No action has been taken against any of the companies tasked to implement the projects although the deadlines have passed and project conditions, including construction and power purchase agreement (PPA), have been violated.
Instead, the government is repeatedly extending the construction periods even though there has been no progress.
However, some entrepreneurs have said that the projects are not making significant progress due to many complications and obstacles, including a lack of financing and government policy support.
Talking to The Business Post, several officials of the Bangladesh Power Development Board (BPDB) have said that almost all the companies that were awarded renewable power projects exist only in name. Their efficiency and capacity were not evaluated before the deals were signed as they reportedly used the names of people in positions of power.
BPDB officials said the construction progress of solar power plants is very disappointing and sometimes the companies are even untraceable.
State Minister of Power, Energy and Mineral Resources Nasrul Hamid holds progress meetings with entre-preneurs every six months but many of them do not attend. Under the circumstances, Power Division was forced to cancel the contracts for five solar power plants’ construction in 2021.
BPDB Member (Company Affairs) Md Shamsul Haque told The Business Post that land acquisition has been a major challenge in the construction of solar power projects. Although there is a contract to build power stations, many companies are falling behind because they are unable to acquire land and fulfil the condi-tions of foreign partners and lenders.
The government aims to achieve 40 per cent of electricity generation from renewable sources by 2041 un-der the ongoing Integrated Power and Energy Master Plan. Besides, the same target has been set in the Renewable Energy Policy alongside the Mujib Climate Property Plan.
Bangladesh also aims to generate 10,443 MW of electricity from all RE-based power plants by 2030. To that end, the government has permitted the construction of 32 RE-based power stations as Independent Power Producers (IPP).
However, only seven stations with 250 MW of capacity had started power generation but they are not operating now due to various problems.
Repeated extensions
According to the latest BPDB report, 12 RE-based power plants with 608 MW of capacity are currently un-der construction.
Of them, the Gaibandha 200 MW Solar Park Project of Teesta Solar Limited, a subsidiary of Beximco Group, is now in operation on a trial basis. As per the contract signed in 2017, it was supposed to begin commercial operation in 2018.
BPDB has extended this project’s COD deadline twice. The last COD was in December last year, but the plant is yet to start commercial operation.
Also, the contract for the Patgram 5 MW Solar Park of PV Power Patgram Limited in Lalmonirhat was signed in January 2018 and it was supposed to be commissioned by the end of that year.
The COD deadline was later extended twice to December 2022. The BPDB report says that only Engineer Equipment and Construction (EPC) activities are still underway.
Eiki Shoji and Sun Solar Limited’s Goainghat 5 MW Power Plant in Sylhet was approved in 2016 but the EPC activities got underway only recently.
The agreement for the Haor Bangla-Korea Green Energy Limited’s solar park project in Dharmapasha, Sunamganj was signed in 2016. But its gridline construction is underway only now.
Moreover, Tetulia 30 MW Solar Park by Karatoa Solar Limited, Bera 3.77 MW Solar Park by Saudia Agro Solar PV Power Plant Limited, Pabna 100 MW Solar Park by Dynamic Sun Energy Private Limited, Cox’s Ba-zar 60 MW Wind Power Plant of US-DK Green Energy Limited (BD), and Mongla Green Power Limited’s 55 MW Wind Power Plant — all of them have failed to meet the first COD and are now only undergoing pre-liminary work.
A senior Power Division official, requesting anonymity, said that in most cases, considering the ease of get-ting the projects, local entrepreneurs had proposed to build the plants jointly with foreign partners. In the beginning, it was not checked whether there was land available for building the power stations.
A BPDB director, also asking not to be named, said that relatives of influential people have opened anony-mous companies and shared solar power plants without any experience. But these issues were not proper-ly evaluated when the contracts were signed.
Where is IDCOL’s money going?
Infrastructure Development Company of Bangladesh (IDCOL) is a state-owned organisation that is financ-ing the development of renewable energy projects in Bangladesh.
Wishing not to be named, an IDCOL official told The Business Post that the company provides up to Tk 12-13 crore in funding for a 1 MW solar power project.
Entrepreneurs can get up to 70 per cent in loans from IDCOL for renewable energy projects if they have a PPA with BPDB. However, they will have to show the progress of the power plants.
Many power plants took loans by showing initial progress but they could not be traced back later.
The IDCOL official expressed the inability to provide information on the number of such companies and how much money in total they have taken in loans.
13 more projects in the pipeline
The government plans to build 18 power plants using renewable energy sources by 2030, officials said.
BPDB is also prepared to sign contracts for 13 more renewable energy power plants capable to generate 596 MW, even though most of the previous ones are yet to see the light of day.
Panchagarh 50 MW, Jamalpur 0.852 MW, Nilphamari 50 MW, Debiganj 20 MW in Panchagarh, 10 MW in Moulvibazar, Mirsarai 50 MW in Chattogram, Khulna 50 MW, Chuadanga 50 MW, Pabna 65 MW, Sonagazi 30 MW in Feni, Jamalpur 100 MW, 70 MW in Ishwardi, Muktagacha 50 MW in Mymensingh — all these proposed plants are waiting for solar power park contracts.
Dipal C Barua, founder and chairman of the country’s solar energy pioneer Bright Green Energy Founda-tion, told The Business Post that the companies are profiting from the sale of solar power plant licences without even implementing the projects.
The government should not award licences to anyone without conducting proper background checks, he added.
Associate Professor SM Nasif Shams, the director of Dhaka University’s Institute of Energy and an entre-preneur involved in Pabna’s Bera 3.77 MW solar power project, said that the reasons why solar power pro-jects are not seeing any success include many government policy obstacles.
Domestic entrepreneurs do not have the money because commercial banks are not financing and the gov-ernment has not given any instructions to the banks in this regard, he said.
For this reason, domestic entrepreneurs are approaching foreign partners, but that creates the possibility of foreigners becoming full owners of the power plant. And that is why entrepreneurs are losing interest even after getting the power plant licences, he added.
