Power Projects Trapped in Bureaucratic Complications

To reduce dependence on imports and increase renewable energy generation, the government has planned to add 918 megawatts of solar power to the national grid. The Bangladesh Power Development Board (BPDB) will purchase solar power from 12 private Independent Power Producers (IPPs) at a rate of Tk 10.50 per unit.

The BNP government has taken an initiative to generate 689 megawatts of grid-connected solar power with BPDB’s own financing. Large solar power projects have been undertaken in different areas, including Fatikchhari in Chattogram, Kurigram, Pabna and Rajnagar in Moulvibazar.

Tenders have already been invited for the projects. Consumers have been given an opportunity to earn Tk 10.50 per unit by installing solar panels and batteries, meeting their own electricity needs and supplying surplus power to the national grid. To receive this benefit, solar systems must be installed and surplus electricity must start being supplied to the grid under the net metering system by February 28, 2027. Consumers who meet the required conditions will receive the benefit until February 28, 2030.

According to an order issued by the Internal Resources Division (IRD) of the Ministry of Finance on September 16, the existing 15 percent VAT and 2 percent advance tax on imports of solar equipment for industrial use have been withdrawn. As a result, these equipment can now be imported at a 1 percent customs duty.

Apart from industrial establishments, other commercial importers will also be able to import almost all solar equipment and parts at a 1 percent duty, except for a few components produced locally. Several private companies have already taken initiatives to generate solar power in different districts of the country. Private investors have to purchase their own land for these projects. The government will allocate fallow land through the Public-Private Partnership (PPP) system for large solar power projects.

So far, private companies have applied to the Ministry of Land for land allocation for 12 new solar power projects. The district administrations and the Ministry of Land are adding various conditions to the land allocation proposals. However, such conditions were not imposed on electricity and solar power projects during the previous government. At that time, land was reportedly allocated as requested.

Under the current government, allegations have emerged against bureaucrats, including Additional Secretary Aminul Emlam. It has been alleged that he is not following the Prime Minister’s instructions or the instructions of the Land Minister and is imposing new conditions. These conditions are reportedly becoming a major obstacle to implementing power development projects in the future.

Meanwhile, as a symbolic initiative, solar power will be introduced at the Prime Minister’s Gulshan residence from October 1. Rooftop solar panels are also being made mandatory at all district council and union council complexes.

There are four major reasons behind the existing crisis in the power and energy sector. These include the long-standing lack of gas exploration, dependence on imports, unplanned development of the power sector, and the Middle East war situation along with the failure of a floating LNG terminal.

However, the previous Awami League government bears the greatest responsibility overall, according to the report. During its 15-and-a-half years in power, it allegedly pushed the country’s power and energy sector into a severe crisis. Although electricity generation was increased and load-shedding was reduced, the government made the country’s crucial sector heavily dependent on foreign sources.

It also allowed preferred individuals and companies to set up power plants under the Quick Rental system, resulting in huge payments by the state as capacity charges. The country has faced serious economic pressure while paying capacity charges to numerous local and foreign companies.

In addition, widespread looting and corruption allegedly took place in the power and energy sector during the Awami League government. The serious damage from those activities is now becoming apparent, while the people of the country are having to bear the consequences. The BNP government is also struggling to address the crisis.

It is learnt that the government has set a target of meeting 20 percent of total electricity demand from renewable energy by 2030 to address the ongoing energy crisis and develop an alternative to the import-dependent energy system. To achieve this target, major tax benefits have been provided for importing various equipment used in solar power generation, as well as raw materials required to manufacture such equipment. Large investors are also being encouraged to invest in the renewable energy sector.

The government has also taken initiatives to expand the net metering system at the household level. Under the system, the government plans to purchase electricity from solar power producers at Tk 10.50 per unit. The government is setting up a Tk 1,500 crore fund to provide low-interest loans for the installation, expansion and modernisation of rooftop solar power and other renewable energy systems in homes, institutions and industries. This will help reduce dependence on fossil fuels and the pressure of subsidies.

The government is prioritising renewable energy to meet rising electricity demand and reduce pressure on imported energy. If investors have to purchase their own land, both project investment costs and electricity prices will increase. Therefore, the government will allocate fallow land through the PPP system for large solar power projects.
Already, on the Prime Minister’s instructions, various ministries and departments have submitted lists of their fallow land.

Together, the ministries have submitted reports covering nearly 60,000 acres of land. After verification and screening, around 300 acres have been identified. An official of the Power Division, speaking on condition of anonymity, said the government would provide the land, while investors would bring investment and technology to implement solar power projects there. The capacity of distribution and transmission lines is also being considered when selecting the land.

A solar power plant with a capacity of one megawatt requires around 2.5 to 3 acres of land. However, Bangladesh Sustainable and Renewable Energy Association (BSREA) President Mostafa Al Mahmud has a different view regarding the land issue. He said, “The energy transition is falling behind not because of a shortage of land, but because of a lack of good ideas and policy problems.”

He added, “Apart from land, sincerity on the part of the government is also essential to move the projects forward.” He further said, “A section of businessmen do not want solar power to expand in this country. If solar power reaches every household in the country, it will not be profitable for them, which is why they do not want it.”

Previous governments talked about expanding solar power but failed to make significant progress in practice. The current government is taking new initiatives in this regard. Solar power can play a significant role in overcoming the crisis. A target has been set to generate at least 20 percent of electricity from renewable sources and 30 percent by 2040. As part of this target, the Power Division has set a goal of generating 5,500 megawatts of solar power by 2030.

However, a major challenge for solar power is the shortage of land required to establish plants. Experts believe that if sufficient land cannot be arranged, all these targets will be delayed.

It is learnt that the government has adopted various action plans to overcome the country’s ongoing energy crisis. Policymakers are working around the clock to find effective solutions. Various meetings and reviews are continuing in this regard.

The government is taking practical measures to increase gas and electricity supply quickly. In particular, the Energy Division is considering increasing gas supply to industries as a priority. Prime Minister Tarique Rahman is personally monitoring the entire process. Following the Prime Minister’s instructions, the Ministry of Power and Energy is working on short-, medium- and long-term plans.

According to the government’s roadmap, 150 wells will be drilled and three LNG terminals will be installed by 2030 to increase gas supply. The government wants to increase daily gas supply to 5 billion cubic feet by that time. At present, daily gas supply stands at between 2.3 billion and 2.6 billion cubic feet. This means gas supply would nearly double within four years.

At the same time, necessary initiatives have been taken to increase coal production. Speaking in Parliament on September 10 about the power and energy sector, Prime Minister Tarique Rahman said, “The energy crisis will be addressed together with the opposition.” He said, “The government is fully aware of the suffering of the people caused by the gas and electricity crisis. However, this crisis was not created by the current government.”
He said the crisis was the result of the “wrong policies and irregularities of the previous fascist government.”

He added, “This problem did not arise suddenly. During the fascist rule, no effective initiative was taken to extract gas from domestic sources.” In this situation, a 10-year plan has been adopted for the energy and power sector. Some issues are also being examined and tested.

He said the Awami League government and the previous interim government were responsible for the severe condition of the power sector. In particular, power plants were allowed to be established in different locations in the private sector under a special law without proper scrutiny. The government is now not receiving any output from some of these power plants. However, it still has to pay capacity charges.

From 2009 to 2026, the government had to pay Tk 281,398 crore only in capacity charges.
According to the Net Metering Guideline 2025, customers who install rooftop solar power systems by February 28, 2027, and supply surplus electricity to the national grid after meeting their own needs will receive Tk 10.50 per unit for the electricity supplied to the national grid for the following three years, until February 28, 2030.