Bangla govt sets up renewable energy policy

Bangladesh: The government is set to make a policy on renewable energy to facilitate development of the sector to meet 10 percent of the country's total power demand by 2020.

The policy 'Renewable Energy Policy of Bangladesh' is expected to receive the green light from the council of advisers in two months, a senior official of Power Cell said.

“We are framing the policy to encourage coordinated development of renewable resources to attain optimum benefit. I hope it will be finalised in two months' time,” said Mohammad Abdul Jalil, director general of Power Cell.

The government move on renewable energy solar, wind, biomass and biogas came amid growing concerns on a steady decline of non-renewable resources such as fossil fuel, which has prompted many countries to seek alternative sources of energy to meet future need.

Bangladesh is more dependent on non-renewable resources such as petroleum and natural gas to meet demand for power. The contribution of renewable sources to power generation remains negligible, stakeholders said.

To increase contribution, the government had earlier taken steps to finance installation of the Solar Home System (SHS) in the off-grid rural areas under a project named 'Rural Electrification and Renewable Energy Development Project', financed by global lending agencies.

Until May, the total number of SHSs stood at 211,000 generating about 11 MW of electricity, according to the state-run Infrastructure Development Company Ltd (IDCOL), which promotes installation of SHS with the participation of organisations such as Grameen Shakti and Rahimafrooz.

The government has also taken steps to encourage generation of energy through biomass, and biogas due to the availability of rice-husk, crop residue, woods, jute stick and animal waste.

“In Bangladesh, efficient utilisation of renewable energy resources is yet to assume commercial dimensions and hence rational policy dissemination on renewable energy usage is essential,” the draft policy said.

The draft policy recommends establishment of an institution named Sustainable Energy Development Agency (SEDA) to ensure development of renewable energy.

SEDA will also support establishment of small and medium renewable energy enterprises and providers, create market opportunity and start-up business models, the draft says.

To encourage private sector investment, the draft policy favoured providing appropriate subsidy for installation of solar, wind and biomass utilities.

“Renewable energy project sponsors, public or private, shall be exempted from corporate income tax for a period of 15 years,” it said.

The project sponsors will also be allowed to import equipment without payment of custom duties, VAT and any other surcharges and import permit fees, provided that the equipment is not produced locally, according to the draft.

It also said that a network of microcredit support systems will be established, especially in rural and remote areas, to provide affordable financing for consumer purchases of renewable energy equipment.

Sohel Ahmed, general manager of Rahimafrooz Renewable Energy Ltd, praised the government's move but said the policy should have an option allowing renewable energy producers to supply to the national grid.

“Options for supplying to the national grid should be available in the policy for greater benefit,” he said.