The Bangladesh Power Development Board (BPDB) has sought a "clear directive" from the Power Division to decide on the fate of 34 solar power plants, officials said.
The BPDB in a recent letter sought the directive after its board of directors earlier this month decided to seek government approval to scrap the Letters of Intent (LoIs) issued in favour of the solar power plants under the Special Provisions Act, they said.
Earlier in August last year, the Power Division issued an office order citing that all kinds of ongoing negotiations, project selection/processing, and the processing of procurement will remain suspended temporarily under the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010 (amended 2021). The order, however, also mentioned that the activities will continue in case of deals already signed under the act.
Later in November last year, the Power Division in a letter to the BPDB said that the government would no longer build any power plants or process any power purchase agreement under the Special Provisions Act. The letter also said that the High Court had cancelled the section 6 (2) and section 9 following a writ petition.
As a result , the procedures in case of the 34 solar power plants for which the LoIs were issued, but no Implementation Agreement (IA), Power Purchase Agreement (PPA), and Land Lease Agreement (LLA) had been signed, has to be completed through open tender instead of Special Provisions Act.
Following the Power Division's directive, the BPDB on November 18 last year issued letters to 34 solar power plants informing them about the government decision.
Later in late July, the Power Division informed the BPDB that the gazette notification of the ordinance repealing the Special Provision Act has been published. In line with the section 2 (GA) of the ordinance, the government preserve the right to review any activities taken under the Special Provisions Act.
Sources said the BPDB board meeting discussed that, since the government reserves the authority to review any activities taken under the Special Provisions Act, it needs clear directive from the government before finally scrapping the LoIs issued for 34 solar power plants. These 34 solar power plants were expected to generate 5,681 megawatts of electricity.
Following the decision to scrap the LoIs under the Special Provisions Act, a number of entrepreneurs filed writ petitions with the High Court. The High Court after hearing the petition issued a rule asking the respondents to explain as to why the ordinance should not be declared unconstitutional and why the letter issued by the BPDB on November 11, 2024 should not be declared to have been done without lawful authority and therefore of no legal effect. Also the High Court asked why the BPDB should not be directed to sign PPA and IA with the petitioners.
Earlier in July, the Bangladesh Sustainable and Renewable Energy Association (BSREA) urged the government not to scrap the LoIs issued in favour of the solar power plants. BSREA President Mostafa Al Mahmud said the investors have become sceptical about the sustainability of the government's policy due to sudden cancellation of LoIs.
He said that the entrepreneurs had already invested some $300 million for the projects, but now facing uncertainty, sending wrong signal to foreign investors about the viability of Bangladesh's policy.
syful-islam@outlook.com
