RE tender gets poor response
Bangladesh鈥檚 energy transition came to an abrupt stop with the country鈥檚 interim government struggling to find investors in renewable energy projects.
After assuming power following the fall of the Awami League regime amid a mass uprising in July-August, the interim government cancelled all 31 renewable energy projects in the pipeline with a combined capacity of over 2,600MW.
Just a step behind signing the power purchase agreement, the cancelled renewable energy projects had been awarded without tender, under the protection of an indemnity law.
But new tenders, floated in three phases since December 2024, sparked debate over the eligibility criteria, which energy experts found to be facilitating AL-era power investors, big companies and foreign investors.聽
The response to the tenders, however, has been聽 very poor so far, prompting authorities to extend deadlines.
Only four renewable energy projects are currently under construction, scheduled to come online this year, with a capacity of about 100MW.
鈥楾hat鈥檚 probably all about new renewable energy projects to be implemented through next year,鈥� said Shafiqul Alam, lead energy analyst, Bangladesh, the International Institute for Energy Economics and Financial Analysis.
鈥業nvestors are apparently unwilling to invest in Bangladesh now,鈥� he said.
Cancellation of the previous renewable energy projects, some of which involved foreign investors such as Marubeni Corporation, Total Gas, and Engreen Limited, caused trust issues, highlighting uncertainties in doing business in Bangladesh, energy experts said.
The foreign investors had spent millions, some of them $200 million, and over half a decade of their time in advancing their projects that were eventually cancelled.
The foreign investors scrapped agreements with banks, a prerequisite for signing PPA following the receipt of the letter of intent from the government to get the investment.
鈥楴ew renewable energy projects would not be bankable,鈥� said a former employee of one of the foreign investors, confirming the shutdown of their Bangladesh office.
Government guarantee is what made previous projects bankable, he said, adding that no such guarantee is achievable in the current process.
鈥楪etting assurance from the financially strained Bangladesh Power Development Board does not sound exciting,鈥� he said.
Floated on December 5, 2024, the first tender invited proposals for setting up 12 solar power plants with capacity between 10MW and 45MW in nine locations.
The deadline for the first tender was extended once due to poor response, prompting authorities to relax its eligibility criteria. The next deadline is March 5.
Initially, applicants, who could be individual firm or joint venture or consortium or association, would have to have experience in successfully implementing two ground-mounted grid-tied solar projects, each with a minimum capacity of 20MW.
One of the solar projects would have to be implemented outside the tenderer鈥檚 country, showed the tender document.
BD Rahmatullah, a former director general of the Power Cell, described the condition as discouraging to local investors while opening the market to big foreign companies.
鈥楲ocal renewable energy enthusiasts are desperately looking to find foreign partners, often in vain,鈥� he said.
During the past 15 years of the AL regime, 12 countries got involved in 75 renewable energy projects, including those that rolled into operation, with a combined capacity of 5,489.6MW.
China topped the list becoming engaged in building 22 power plants with a capacity of 1,601MW.
Bangladesh was involved in building 1,258MW, followed by Singapore co-financing solar power projects with a capacity of 728MW, the United Arab Emirates co-financing 470MW, Japan 400MW, India 250MW and Germany, the Netherlands, the United Kingdom, and Korea co-financing 100MW or a bit more each.
Countries like Norway, France, and the United States also invested in solar power projects with capacities of only 50MW each.
The second tender invited proposals for building 10 solar power plants with 50MW capacity each in seven locations. The tender will expire on March 10.
Proposals for constructing 19 power plants with capacities ranging between 70MW and 100MW in 13 specific locations were floated on January 27 with a deadline of March 31.
鈥楢ll tender deadlines are likely to be extended, by up to three weeks,鈥� said Golam Mortuza, the BPDB official in charge of taking care of the tenders.
He said that the eligibility criteria would be relaxed to make the bidding even more competitive.
Despite making announcements about providing land and a transmission network to facilitate future renewable energy projects, the interim government has come up with no such measures in the ongoing bidding.
The locations specified in the tenders refer to sub-stations from where the BPDB will receive electricity supply from the solar power plants to be built, the PDB official said.
There are at least seven potential AL-era investors who have land near the locations mentioned in the last tender. PDB officials said that these AL-linked investors were likely to get the solar projects.
Bangladesh鈥檚 current installed power generation capacity is 27,884.7MW. Of the capacity, renewable energy accounts for only over 993MW.
Except for a wind and a hydroelectric plant, there are 14 solar power plants currently in operation, 11 of them owned by private companies known as AL favourites. The biggest solar power plant is of 200MW.
鈥楾he ongoing bidding is likely to favour AL favourites in many ways,鈥� said Bangladesh Working Group on Ecology and Development member secretary Hasan Mehedi.
鈥楤angladesh鈥檚 energy transition has never been so uncertain,鈥� he said.