The government of Bangladesh has launched a €200 million ($217 million) Green Transformation Fund to offer soft loans for the import of environmentally-friendly products and energy efficiency components from Europe.
A senior official at the central bank of Bangladesh has told pv magazine the fund can be expanded from the lender’s euro reserves if there is sufficient demand.
“This fund will facilitate importing green equipment and machinery from [the] Eurozone,” said the source.
The move comes after the government opened a similar, dollar-denominated $200 million fund in January 2019.
The central bank will charge lenders authorized to distribute the loans the Euribor Eurozone daily interbank lending rate plus 1%, with that figure just 1% on days when the European rate is at zero or negative. Loan distributors will then be able to charge up to 2% on top of their own costs to issue funds for up to ten-year periods.
The dampening effect of the Covid-19 pandemic on global interest rates makes it likely clean energy developers in Bangladesh will be able to take advantage of affordable interest rates from the fund, according to Mohammad Khurshid Wahab, general manager of the nation’s central bank.
However, Bangladesh Solar and Renewable Energy Association president Dipal C Barua said the proposed interest rates were not low enough, at a time when developers are already adversely affected by the public health crisis.
“The economy may face dire difficulties in the post-virus era, thus we need cheap loans to cope with the adversities,” Barua told pv magazine.
Munawar Misbah Moin, president of the Solar Module Manufacturers Association of Bangladesh said the renewables energy sector in the country was really feeling the heat. “Every productive support from the government will be needed for the industry to make a turnaround,” he said.
Bangladesh generates around 629 MW of renewable energy at present, with around 395 MW of it from solar.
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