Duty cuts, tax breaks key to spurring renewables: Energy experts

Policymakers, economists and energy experts have called for a customs duty cut on import equipment and tax break for renewable energy sector growth in Bangladesh.

Such a policy will be the best incentive to encourage investment in the renewable energy sector from home and abroad, they said while speaking at a virtual dialogue organised by the Centre for Policy Dialogue (CPD) yesterday.

CPD's Research Associate Mashfiq Ahasan Hridoy presented a study paper titled "Opportunities and Challenges for Overseas Investment in the Renewable Energy Sector of Bangladesh: The Case of China." The study was conducted by a CPD team led by its Research Director Dr Khondaker Golam Moazzem.

Addressing the event as the special guest, Waseqa Ayesha Khan, chairman of the Parliamentary Standing Committee on the Ministry of Power, Energy, and Mineral Resources, highlighted the importance of reducing duties on the import of raw materials and equipment for renewable energy. She stated that such measures would significantly encourage investments in the renewable energy sector.

"The power sector in Bangladesh has attracted approximately $30 billion in Foreign Direct Investment (FDI) over the past decade, a testament to its profitability. However, bureaucratic hurdles and related processes have posed challenges." Ayesha Khan expressed confidence in resolving these issues, emphasising that they are not insurmountable obstacles.

Addressing as the chair of the event, Syed Manzur Elahi, treasurer of CPD Board of Trustees, emphasised the need for the National Board of Revenue to decide whether its focus should be revenue-oriented or investment-oriented. Encouraging investment, he argued, would ultimately lead to greater revenue generation.

Ayesha Khan proposed that there are economic zones in Bangladesh where foreign investors can invest in the production of solar and wind power equipment. She also stressed the importance of diversifying investment beyond power stations, including electric vehicles, power storage facilities, charging stations, and technology transfer.

Syed Manzur Elahi, also the founder of Apex Footwear, highlighted the increasing customer demand for sustainability and renewable energy. He stressed the importance of renewable energy, especially as fossil fuel costs had caused a significant increase in production expenses.

Chinese Ambassador Yao Wen shared insights into China's progress in renewable energy. He mentioned China's commitment to reducing carbon emissions and becoming a carbon-neutral country by 2060. China's installed capacity for renewable energy has increased substantially, accounting for over 40% of the country's total power generation capacity, said Yao Wen, expressing China's willingness to cooperate with Bangladesh in the renewable energy sector.

The CPD study suggested that China's success in renewable energy development is attributed to its legal system, institutional capacities, advanced technologies, and effective policies. It recommended that Bangladesh seek assistance from countries like China, Germany, and Finland to unlock its full potential in the solar and wind energy sector.

Mohammad Hossain, director general of Power Cell, Power Division, was present as the guest of honour at the dialogue. 

The panel of discussants included Wang Weiquan, deputy secretary general of Chinese Renewable Energy Industries Association, Qin Haiyan, secretary general of China Wind Energy Association, Sohel Mahmud, manager (deputy secretary) of Environment & Development Bangladesh Economic Zones Authority, Peng Gan, managing director of Chint Solar (Bangladesh) Co Ltd, and Rong Hai, chief representative of Southwest Electric Power Design Institute Co Ltd Bangladesh Branch.