Dedicated fund by central bank essential to promote renewable energy: Economists, energy experts

The creation of a dedicated renewable energy fund by the Bangladesh Bank is essential to promote green financing, economists, journos and energy experts said.

Otherwise, it will not be possible to remove the existing barriers to access institutional financing, they said today (1 June) while addressing a seminar at the 2nd Dhaka Renewable Energy and Finance Talk.

Change Initiative, a research body, organised the event at the Military Museum Multipurpose Hall in the city. Tahmid Zami, Bangladesh Correspondent and Climate Reporter for Thomson Reuters Foundation, moderated the event.

M Murshed Haider, Infrastructure Finance and PPP Consultant of World Bank, said one of the key problems in financing renewable energy projects is the lack of available funding for long-term financing.

"Bangladesh Bank has some refinancing schemes for green products, but there is no dedicated renewable fund for green energy promotion," he said.

He also observed that safety and a higher return from the investment are also key issues in the case of financing which need to be ensured by the policy support.

Admitting the absence of a dedicated financing scheme for renewable energy, Chowdhury Liakat Ali, director, of the Sustainable Finance Department of Bangladesh Bank said the central bank has been giving policy support to the banks to encourage them to promote renewable energy.

He also admitted that there are some criteria for accessing the refinancing of the central bank which the private investors cannot meet. As a result, banks seek BB directives on the issue.

Mohammad Alauddin, rector of Bangladesh Power Management Institute and former chairman of Sustainable and Renewable Energy Development Authority (Sreda), said there were some available funds from the international agencies.

But the financial closing to those funds takes a huge time as the investors need to fulfil some criteria to avail the funding, he said.

He also said that there is huge potential for rooftop solar power in the country. But so far no successful business model was developed on which it could be utilised.

Nayoka Martinez-Bäckström, first secretary and deputy head of Development Cooperation, Embassy of Sweden in Dhaka; Dr Fazle Rabbi Sideque Ahmed, Deputy Managing Director of Palli Karma-Sahayak Foundation (PKSF), and Sabbir Hossain, DMD and Chief Operating Officer of Sustainability Unit of BRAC Bank Limited, also spoke on the occasion.

In another session of the seminar, a former member of Sreda, Siddique Zobair, said in general, subsidy is not good. But it is essential in the case of promoting renewable energy in transformation from fossil fuel.