Govt plans Pakistan-styled solar power project with 5-year tax holiday: Minister

The government is planning to launch a large-scale solar power initiative, following the success of similar projects in Pakistan, offering investors a five-year tax holiday to accelerate renewable energy development in the country.

Power, Energy, and Mineral Resources Minister Iqbal Hasan Mahmud Tuku yesterday came up with the disclosure while speaking at a stakeholder consultation workshop organised by the Bangladesh Economic Zones Authority (Beza) in the capital. 

Referring to the success story of Pakistan in the field of solar energy, he said, "Pakistan government had imported solar equipment to hand over to the investors along with incentives, which proved successful."

He said Bangladesh could also import such equipment directly or allow the private sector to import solar equipment at zero duty.

Highlighting Dhaka's solar potential, the minister said, "If all the rooftops in Dhanmondi and Mohammadpur are leased to private investors and they generate electricity through net metering, it would be possible to produce 1,000MW of power only from these two areas. This would also reduce pressure on the national grid and allow the saved electricity to divert to the industries."

The workshop focused on the Sonagazi 130MW Solar Power and Battery Energy Storage System (BESS) PPP project at the National Special Economic Zone in Mirsarai, Chattogram.

The event was attended, among others, by State Minister for Power and Energy Anindya Islam Amit and Beza Executive Chairman Ashik Chowdhury.

"As a businessman, I understand what kinds of incentives are needed to attract investors. The success of our garment sector was built on the back-to-back LC and bonded warehouse facilities introduced in 1979. We want to bring a similar major transformation in the solar energy sector," said Iqbal Hasan. 

The minister said the Power Division is currently working on reducing duties and taxes on three key solar components – solar frames, photocells, and batteries.

"Investment must come first before revenue. If minimum duties and taxes are imposed on imports and a five-year tax holiday is offered, entrepreneurs will be encouraged to invest. After five years, the government will naturally receive taxes. We are considering the matter," he said.

He also stressed the need for greater private sector involvement in the power sector to overcome stagnation in management and bill collection caused by nationalisation.

"The government will not invest; it will only ensure necessary facilities and support while investment will come from the private sector," he clarified.

At the workshop, a detailed outline of the proposed Sonagazi Solar Power Project in Feni and the "Guidelines for Development of Renewable Energy Projects using Land Owned by Government Agencies under PPP Modality, 2026" were presented for implementing renewable energy projects on government-owned land.

The main objective of the project titled "130-140MW (AC) Grid-Tied Solar Power Plus Battery Storage" is to develop a bankable and sustainable model for solar power generation through a PPP modality on 412 acres of land owned by Beza, which can later be replicated across the country.

Under the guidelines, the project, planned on government-owned land under a PPP framework, will have the Bangladesh Power Development Board as both the contracting authority and the off-taker of the electricity generated.

Explaining various aspects of the project, Beza Executive Chairman Ashik Chowdhury said the project would be implemented jointly by Beza, the Power Division, the UNDP and the ADB.

Senior officials presented the technical sessions while representatives from Bangladesh Power Development Board, Power Grid Company of Bangladesh, Sustainable and Renewable Energy Development Authority, Asian Development Bank, as well as various private investors and development partners, participated in the panel discussion which was followed by a question-and-answer session.