The Infrastructure Development Company Limited (IDCOL), a state owned financial institution, has reportedly said it will provide loans for the project.
"Plants with an average capacity of 25 kilowatts (kW) will be installed in the off-grid areas of Bangladesh, which will generate 113 kWh electricity every year," IDCOL chief executive officer Islam Sharif said.
Sharif went on to explain that a 25 kW solar mini-grid can save the kerosene consumption of 60 households or small shops in the rural areas, each of which consumes eight litres of kerosene per month.
"This will save 11,520 tonnes of kerosene per year altogether, and cut dependency on fossil fuels," he said, adding that "each solar mini-grid will generate electricity for four and a half hours and produce 113 kWh electricity. This will reduce the national grid demand by 82GWh per year."
IDCOL will select some non-government organisations (NGO) or private entities as partner organisations to implement the plan on the basis of their management capacity, financial strength and micro-finance experience, Sharif continued.
"IDCOL will first assess the proposals submitted by the organisations, approve those based on some specific guidelines and then give out grants and soft loans," the IDCOL CEO said.
"The organisations will select the plant areas and target consumers. They will be bound to operate the plant for at least the loan period," he added.
Although Bangladesh boasts significant experience in installing solar home systems in remote and off-grid areas, the solar mini-grid project is the first of its kind here.
As of May 2011, 950,000 plus photovoltaic systems were installed in Bangladesh, supported by the government and financed by IDCOL under its Solar Home System (SHS) project, along with 30 NGO and private sector partners.
As another new addition to the energy sector, the Bangladesh Government recently has taken up a pilot project to use solar energy for irrigation pumps.
The country’s government has also lifted all sorts of tax and VAT on renewable energy equipments to encourage the use of sustainable renewable energy sources.