The international development lender’s Scaling-up Renewable Energy Project aims to mobilize $212 million in private sector funding to establish a Renewable Energy Financing Facility to provide credit to developers of rooftop and large-scale PV.
The World Bank cash will mainly be channeled through Bangladesh’s Infrastructure Development Company Limited (IDCOL), which has so far invested $2 billion in renewable energy and which aims to use the new funds to drive more than 300 MW of PV capacity by 2022 from rooftops alone.
A senior official at IDCOL told pv magazine, with the production cost of electricity from renewable energy falling significantly and at par with fossil fuels, many businesses are keen to establish renewable energy power plants.
Leveraging private investment
The official added, any entrepreneur who wants to draw upon Scaling-up Renewable Energy Project cash will have to provide 20-30% of project costs themselves.
With falling component prices making renewable projects more attractive to investors, it is anticipated commercial banks and other private backers will come forward, said the IDCOL official, adding: “This way … IDCOL will mobilize the stated $212 million for renewable power.”
One of the first projects to be financed by the World Bank cash will be a 50 MW plant in the Feni district of Bangladesh.
The World Bank credit comes from the lender’s International Development Association, which provides concessional financing, has a 30-year term that includes a five-year grace period, and an interest rate of 1.25% plus a service charge of 0.75%.