HC questions legality of cancelling primary approvals for 10 renewable energy projects

The High Court has issued a rule questioning why the government's decision to cancel Letters of Intent (LOIs) for 10 renewable energy projects – where significant groundwork, including land acquisition, has already been completed – should not be declared illegal.

The court also questioned why the ordinance repealing the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010 should not be declared unconstitutional.

The bench of Justice Sashanka Shekhar Sarkar and Justice K M Zahid Sarwar issued the rule yesterday after hearing separate writ petitions filed by the companies involved in the affected projects.

The court has directed the power and energy secretary, the chairman and secretary of the Bangladesh Power Development Board (BPDB), and the secretary of Power Grid Company of Bangladesh to respond to the rule within eight weeks.

Barrister Nihad Kabir participated in the hearing as a senior counsel in support of the petition and confirmed the court's decision to The Business Standard.

The High Court has issued a rule asking why the recent ordinance repealing the speedy power supply Act should not be declared unconstitutional. It also questioned why the government's decision to cancel the LOIs of 10 companies should not be declared illegal, she said.

The projects, mostly solar power ventures, involved are Dimla Solar Park Ltd, JN Basail BD Solar Park Ltd, Chakaria Wind Power Ltd, Setabgonj Solar Power Ltd, Orion Renewables Munshiganj Ltd, Orion Renewables Munshiganj Ltd, Energon Renewables (BD) Ltd, Cassiopea Fashion Ltd, Satkhira Green Energy Ltd, and Engreen Engineering Ltd.

Senior lawyer Ahsanul Karim appeared as lead counsel for the petitioner companies, assisted by Barrister Md Mustafizur Rahman.

Ahsanul Karim told TBS that the government issued the ordinance repealing the speedy power supply Act 2010 following a previous High Court verdict. However, he pointed out that the court's ruling had clearly stated that any ongoing projects initiated under the previous law must be allowed to continue.

"Instead of complying, the government repealed the entire law and issued a new ordinance, which directly contradicts the High Court's directive," he said.

He added, "The previous law was still relevant to current needs. If the country faces a power crisis, there is no alternative mechanism in place to respond quickly. That's why we challenged the legality of the new ordinance in court, and the court was convinced to issue a rule questioning its validity."

Ahsanul Karim further said that under the Act, ten projects received LOIs from the government. Most of these projects involve foreign investment and were initiated to produce low-cost electricity.

"All ten petitioning projects have international partners. If these are cancelled, it will discourage future foreign investment in Bangladesh's energy sector."

He added, "The companies have collectively acquired thousands of acres of land and completed most of the preparatory work. Despite this, on 18 November, the BPDB unilaterally notified the companies of contract termination, stating that no further steps would be taken."

According to him, the BPDB cited a High Court verdict in its notice, but the court had clearly ruled that no ongoing project under the previous law could be cancelled.

"The cancellation notice violates that verdict, which prompted the court to issue a rule asking why BPDB's decision should not be declared illegal," the senior lawyer said.

Following a government notification on 14 November last year, which stated that no new power plants would be constructed or power purchase proposals processed under the Quick Enhancement Act, 2010, the ten affected companies filed a petition seeking judicial intervention.

They sought a separate rule questioning the legality of a subsequent notification issued by the BPDB secretary on 18 November, which formally cancelled the LOIs issued to them.

According to the petitions, the power projects were duly approved by various government agencies, including the Land Inspection Committee formed by the BPDB, the Power Grid Company of Bangladesh (PGCB), the BPDP, the Ministry of Power, the Department of Renewable Energy, the Power Division, and the Cabinet Division.

The petitions further stated that the government cannot now act inconsistently or arbitrarily to the detriment of the companies, especially when the projects had previously been approved by multiple government bodies.

In response to a writ petition, the High Court on 14 November last year struck down two provisions of the Act.

One of the annulled provisions had allowed the minister in charge of the Ministry of Power, Energy and Mineral Resources to enter into direct power purchase agreements with power plants without inviting tenders. The other provision granted blanket immunity for such contracts, shielding them from legal challenge.

While scrapping the two provisions of the Act, the High Court in its full verdict stated that to avoid legal complications that may arise from contracts and processes initiated under Section 6(2) of the Act, 2010, this court provisionally condones all actions and steps taken in good faith by the relevant authorities under the Act.

However, the court reserves the right to revisit these actions, including the terms and conditions of the respective contracts and related processes, as deemed necessary.

The court also directed that if any irregularities are found in the approval process of a company's project, appropriate action should be taken following an investigation.