Bangladesh improves conditions for domestic independent power producers

The government of Bangladesh has implemented measures to help domestic IPPs to increase their share of the renewable energy market.

The new rules allow Bangladesh's IPPs to hold a 100% stake in companies owning renewable energy projects, removing the previous 80% limit that required a foreign investor for the remaining percentage.

Under the previous rules, domestic IPPs were also allowed to submit projects through international consortia and to take a 51% share in them, while foreign developers were limited to a maximum share of 20%.

“These new rules will bring more entrepreneurs in renewable energy business at the time when Bangladesh is reeling under severe power crisis that seriously hampered industrial production and brought misery in people’s life due to prolonged load shedding,” said a government spokesperson.

The decision has been submitted to the IPP cell of Bangladesh Power Development Board for necessary changes in bidding criteria.

“We have sent our decision to the IPP cell of Bangladesh Power Development Board for necessary changes in bidding criteria to facilitate the generation of renewable energy,” said Nirod Chandra Mondal, a joint secretary at the Ministry of Power.

However, Imran Chowdhury, the head of business development-Bangladesh for Total Eren, expressed concerns about the execution of projects without experienced operating partners as shareholders.

“The changes in the qualification criteria may help mainly the local sponsor to pass the qualification criteria easily, but a key concern can be how they can execute the project smoothly without having any experienced operating partner in the project as shareholder,” said Chowdhury.