The government has been urged to invite bids under the 'reverse auction' method to attract foreign investors for setting up renewable power plants in the country.
Speakers at a dialogue on Thursday put forward the recommendation mainly to bring back the investors, particularly the Chinese ones, who had proposed to set up 37 renewable energy plants with a capacity of 3,102.6 MWp.
The previous government had already issued necessary letters of intent (LoIs) and the investors were working on the projects awarded under the controversial special provisions (energy) act, but the interim government cancelled the projects immediately after assuming office.
"The cancellation of the projects sent mixed signals to the foreign investors," the meeting was told, stressing the urgent need for removing all bottlenecks hindering foreign investment in the sector.
Speakers suggested taking cautious measures while scrapping the previous deals taken under the controversial law, and inviting new investors as a strategy to achieve the country's renewable energy generation target - 40 per cent of total electricity generation by 2041.
They informed the dialogue that only 4.5 per cent of the country's total energy mix now comes from renewable sources. To achieve the 2041 target, the country would require an estimated annual investment of US$1.5-1.7 billion until then.
The Centre for Policy Dialogue (CPD) organised the event titled "Overseas Investment in the Renewable Energy Sector: How to Attract Chinese Investment in Bangladesh?' at a city hotel, highlighting the current scenario of the sector and opportunities created in different countries, including China.
Moderated by CPD Executive Director Dr Fahmida Khatun, Research Director Dr Khondaker Golam Moazzem presented the keynote paper, calling upon the government to go for a new plan of floating fresh tenders to set up new renewable power plants under 'reverse auction' method.
It would facilitate the 37 investors, including the Chinese ones, to propose again, he added.
China is the largest investor in the sector with $676 billion spent on clean energy in 2023, sharing 38 per cent stake in the global market.
National Board of Revenue Chairman Abdur Rahman Khan attended the dialogue as special guest and Deputy Governor of Bangladesh Bank Md Zakir Hossain Chowdhury as the guest of honor.
Director General of Bangladesh Investment Development Authority (BIDA) Mohammad Ariful Hoque, Lead Energy Analyst of Institute for Energy Economies and Financial Analysis (IEEFA) Shafiqul Alam, Chairman of Chint Solar Bangladesh Co Limited Gan Peng and Head of Sustainability of the Hongkong and Shanghai Banking Corporation Limited Syeda Afzalun Nessa took part in the discussion.
Representatives from different government agencies and private investors, including IDCOL, Grameen Shakti, Abdul Monem Economic Zone and Bangladesh Economic Zones Authority also spoke.
Speakers highlighted bottlenecks in investment, infrastructures, land acquisition, distribution of renewable energy, sustainable financing etc., and said cancellation of the 37 LoIs has left a negative impression among the investors.
Besides abolishing and suspending all related policies and acts, the tax burden as well as the tax incentives should be reviewed for bringing back confidence among the investors, they suggested.
The NBR chairman said the present government has been working on eliminating the controversial tax laws and regulations, but scrapping of existing tax benefits is not under its consideration.
He stressed the need for policy consistency and said the NBR was trying its level best to bring consistency in the tax regime. The government's focus on improving the tax-GDP ratio and bringing back discipline in the tax administration, he added.
He said the NBR has been trying to make rational decisions for all, including people and investors.
In his presentation, Dr Moazzem said the total 41 cancelled energy projects could generate electricity of 5,322.6 megawatt, of which 3,102.6 MW by the 37 cancelled RE based projects.
He also stressed the need for focusing on making financial instruments available for the foreign investment and recommended creating opportunities to address currency risks like hedging products, subsidised currency swaps, partial guarantees for foreign exchange losses as well as taka-denominated bonds.
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