Bangladesh Export Processing Zones Authority (BEPZA) has moved to transition from fossil fuel to renewable energy and sought fiscal support for its industries like that of being provided to the ones located outside the export processing zones (EPZs).
It found existing tax rules applicable in this regard for the industrial units in and outside the EPZs discriminatory.
Insiders said the investment promotion authority for export-oriented industries is encouraging the investors to gradually move towards green energy and ease pressure on the national power grid.
Recently, some large export-oriented industries have already shown their interests to meet some of their power demand by investing further in installation of rooftop solar power systems.
In response to their interests, the BEPZA has sent a proposal to the National Board of Revenue (NBR) to consider waiver of taxes on the equipment required for installation of solar plants in the EPZ industries. The industries outside EPZs are already enjoying a concessionary tax rate on such equipment.
Currently, some 449 industries are located in the eight EPZs across the country. The export-oriented industries get power supply from the national grid and power generation plants set up in the EPZs.
BEPZA insiders believe that the rooftop solar systems in the EPZ industries can save 5.0-10 per cent of the energy produced from fossil fuel.
BEPZA Additional Secretary Ali Reza Mazid sent the letter to the NBR chairman, expressing hope to cut electricity consumption from the national grid by patronising green energy and solar power in the EPZs.
Only equipment, Solar Power Set, is exempted from import duty for the EPZ industries while other equipment and panels are required to pay 25-26.20 per cent import duty, he wrote.
However, the export-oriented industries outside the EPZs are enjoying 1.0 per cent customs duty as per customs order issued on June 1, 2022.
BEPZA sought the similar benefits or tax waiver for photovoltaic cells not assembled in modules or made up into panels and Photovoltaic cells assembled in modules or made up into panels.
Some other equipment such as DC cable, aluminum structure for solar system, automatic regulating or controlling instruments, photosensitive semiconductor devices, articles or glass fiber that are required for solar panel installation also remained under high tax incidences.
Anwar Parvez, Executive Director (PR) of BEPZA, said some 20-25 items are currently exempted from import taxes for industries outside the EPZs while industries located inside of the zones are paying import taxes.
It is possible to meet up to 30 per cent of the power demand of the EPZ industries from solar energy, he added.
Anwarul Islam, General Manager and Group Head Sustainability of Pacific Jeans, said the industry has a plan to go for solar energy production in all of its 13 units in the EPZs by 2025.
"Currently, three of our companies have installed solar power capacity of around 2.0 megawatt and can generate up to 10 MW power per day. We are hopeful to increase the capacity if policy support is given," he said.
There is no local production of such panels and it is completely import dependent, he added.
Bangladesh has a target to meet 40 per cent of its power demands from renewable energy by 2041.
In April 2022, Pacific Jeans Group launched a 3.5 MW solar power plant at its sister concern Universal Jeans, located at Chattogram EPZ.
The group has installed 1299 solar panels on the rooftop of their factory, a single largest among the EPZ enterprises.
Earlier in June 2021, the country's largest rooftop solar power plant with a capacity of 16 MW was inaugurated at Korean EPZ, located at Anwara of Chattogram.
Korean global business conglomerate Youngone has installed the plant involving $16 million, in the first phase, aiming to commission 40 MW rooftop systems. The three phases would require a $40 million investment in the KEPZ.
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