The government is considering sweeping fiscal incentives, including tax exemptions and duty waivers on solar panels and related equipment, as part of a new investment-friendly policy aimed at accelerating Bangladesh's renewable energy transition.
The proposed measures are expected to significantly lower business costs for investors in solar power generation and energy storage, helping the country reduce dependence on costly imported fuel while attracting fresh private-sector investment into the clean energy sector.
Minister for the Ministry of Power, Energy and Mineral Resources (MPEMR) Iqbal Hassan Mahmood made the remarks on Thursday while speaking as the chief guest at the market sounding workshop on the Sonagazi 130 MW Solar PV (photovoltaic) with BESS PPP Project, organised by the Bangladesh Economic Zones Authority (BEZA).
Minister of State Aninda Islam Amit also spoke at the event as a special guest. BEZA Executive Chairman Chowdhury Ashik Mahmud Bin Harun presided over the event in the city.
"Prime Minister has formed a committee to formulate a policy to determine what the government has to offer to support investors in this sector," said the MPEMR minister.
He also said the government would act as a facilitator and provide support for profitable business operations in the sector by formulating an investment-friendly policy very soon.
The minister recalled how a favourable policy adopted by former President Ziaur Rahman had helped boost Bangladesh's garment industry.
The government intends to introduce a similar policy framework in the solar sector to attract investors and accelerate the growth of the solar energy business, he said.
The government may waive taxes on frames, photocells, batteries and other solar equipment to reduce business costs, enhance storage capacity and facilitate expansion of the solar energy sector, he said, emphasising the need to strengthen solar power storage facilities.
Citing Pakistan as a success story, the minister noted that the Pakistani government imported solar equipment and offered it to investors with incentives, yielding positive results.
He said Bangladesh could adopt a similar approach either by directly importing solar equipment or by allowing private-sector imports at zero duty.
Stressing the need to prioritise investment to expand the renewable energy sector, the minister said entrepreneurs would be encouraged if the government imposed minimal duties and taxes on imports and offered a five-year tax holiday.
"Investment must come first before revenue. After five years, the government will naturally receive taxes," he said, adding that the matter would be proposed for discussion among policymakers.
Emphasising the vast solar energy potential in Dhaka, the minister said leasing rooftops in Dhanmondi, Mohammadpur and other residential areas to private investors under a net-metering system could generate up to 1,000MW of electricity from the capital alone.
He noted that such initiatives would reduce pressure on the national power grid and allow conserved electricity to be supplied to industries.
The energy minister reiterated his belief that the government's investment-oriented initiatives could help revolutionise Bangladesh's solar power sector, much like the transformation seen in the garment industry.
"Private sector has a very important role to play in Bangladesh's renewable energy journey," State Minister Aninda Islam Amit said.
Bangladesh must now move toward a more balanced power generation mix, he said.
Imported fuel will continue to have a role, but excessive dependence on imported energy exposes the country to international price shocks, foreign exchange pressure and fiscal burdens.
Solar power can help reduce this exposure, especially if projects are developed at scale and through competitive procurement, he added.
The Sonagazi project is considered an important test case.
It is located in the National Special Economic Zone, where BEZA-owned land can be used for clean energy generation.
The proposed project structure brings together key institutions - BEZA as land owner and project sponsor, the Bangladesh Power Development Board (BPDB) as off-taker, the Power Grid Company of Bangladesh (PGCB) for grid evacuation, the Power Division for policy support, the Sustainable and Renewable Energy Development Authority (SREDA) for renewable energy policy coordination, and the PPP Authority for structuring and procurement support.
The project is also forward-looking because of the potential inclusion of battery energy storage, said the state minister.
As Bangladesh increases the share of solar and other variable renewable energy, storage will gradually become more important for grid stability, peak management and better utilisation of renewable power.
He welcomed suggestions and feedback from the workshop to move ahead successfully with the initiative.
"The government must create the right enabling environment through clear policies and predictable processes, while ensuring proper coordination among agencies," Mr Amit added.
Azizjst@yahoo.com