Pakistan model for solar power under consideration, 5-year tax holiday being explored: Energy minister

Power, Energy, and Mineral Resources Minister Iqbal Hasan Mahmud Tuku has said the government is considering offering nominal import duties and a five-year tax holiday to encourage investment in the solar power sector.

Referring to Pakistan as an example, the minister said the government there imported solar equipment and provided it to investors along with incentives, which proved successful. He added that Bangladesh could also import such equipment directly or allow the private sector to import solar equipment at zero duty.

The government plans to announce an investment-friendly policy for the solar power sector by next June, said the minister at a stakeholder consultation workshop organised by the Bangladesh Economic Zones Authority (Beza) today (14 May).

Highlighting Dhaka's solar potential, the minister said, "If all 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 from these two areas alone. This would reduce pressure on the national grid and allow the saved electricity to be supplied to industries."

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

State Minister for Power and Energy Anindya Islam Amit and Beza Executive Chairman Ashik Chowdhury, among others, were also present at the event.

Speaking as the chief guest, Iqbal Hasan Mahmud said, "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 sector."

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. 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 facilities and support. Investment will come from the private sector," he said.

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

He said the project has three key features. First, government land will be made available to address land shortages faced by private investors, easing investment opportunities. Second, the project will introduce a Battery Energy Storage System (BESS) for the first time in the country, which will help supply power during peak hours and support grid integration. Third, the project will serve as a model case study for future private investment initiatives on unused government land.