Energy assoc urges review of scrapped solar plans

The Bangladesh Sustainable and Renewable Energy Association yesterday urged the interim government to reconsider its cancellation of 31 letters of intent that the past regime had signed with potential investors in solar power projects without adopting any tender process.

A letter of intent is a document outlining the preliminary understanding between two or more parties who intend to enter into a formal agreement.

It is essentially a blueprint for a deal, setting out key terms and conditions before a legally binding contract is finalised.

Last week, the Centre for Policy Dialogue (CPD) also sought a review of the letters of intent.

The floating of tenders seeking bids for 55 new solar power projects was a positive development, but these did not draw foreign investors as expected, said the association.

"In some cases, only one bidder has shown interest, while in others, no one has participated at all," said Mostafa Al Mahmud, president of the association, at a press conference at the Dhaka Reporters' Unity.

Around $300 million has already been invested in the cancelled projects, and the interim government's decision might create a sense of distrust among investors, he said.

Besides, the interim government has cancelled a provision under "implementation agreements" that enabled refunds of investments in cancelled projects, he said.

The refunding is necessary for the expansion of renewable energy generation capacity in the country, he added.

Mahmud thanked the government for updating the renewable energy policy and demanded a specific roadmap towards meeting the renewable energy target.

He said the High Court has already issued a directive to install rooftop solar systems on all buildings, but a clear roadmap such as on the engineering, procurement, construction, and financing aspects has yet to be made available.

The press conference highlighted that increasing the generation of renewable energy is now a national imperative.

Bangladesh is becoming increasingly dependent on energy imports due to a steady decline in gas production, putting substantial pressure on foreign currency reserves, it said.

The association demanded tax benefits for the renewable sector and thanked the government for reducing the customs duty on solar inverters to 1 percent from 10 percent.

"We believe that this kind of tax reduction should be extended to other essential solar components as well, like mounting structures, DC cables, controllers, batteries, and solar pumps—duties on which are still high," it said.

Their demand includes the implementation of net metering guidelines, ensuring the installation of rooftop solar panels on all residential buildings in urban areas, forming a modern monitoring and support framework, and the withdrawal of the 7.5 percent trade VAT.