Solar projects plagued by soaring costs, 'collusive corruption' of Tk2,926cr: TIB study
The study highlights a sharp gap between official cost estimates and actual spending on solar power projects
Bangladesh's renewable energy sector is grappling with massive cost escalations and what has been described as "collusive corruption", leading to an additional burden of a staggering Tk2,926.88 crore on public funds, according to a Transparency International Bangladesh (TIB) study.
The findings were presented at a press conference at the Midas Centre in Dhaka today (24 December), where TIB released its report titled "Electricity Generation from Renewable Energy in Bangladesh: Challenges of Good Governance and the Way Forward."
The study highlights a sharp gap between official cost estimates and actual spending on solar power projects.
While the Bangladesh Power Development Board (BPDB) estimates the cost of generating one megawatt (MW) of solar electricity at about Tk8 crore, six projects reviewed by TIB – with a combined capacity of 505.4MW – spent an average of Tk13.80 crore per MW.
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Speaking at the briefing, TIB Executive Director Dr Iftekharuzzaman told reporters that the country's energy planning had been designed in a way that continued to favour fossil fuels.
"The power sector is among the most corruption-prone. The same pattern of irregularities seen in the fossil fuel sector, including the misuse of capacity charges, is now visible in renewable energy," he said.
TIB also voiced concern over the interim government's decision to cancel 31 unsolicited renewable energy projects, involving an estimated $6 billion in investment. The anti-corruption watchdog warned that the move could damage investor confidence at a time when Bangladesh needs foreign investment to advance its clean energy transition.
According to TIB, Bangladesh's renewable energy ambitions remain stalled as policymakers have yet to place clean energy at the centre of national planning.
As a result, the country's vast renewable potential remains largely untapped despite repeated commitments, it observed.
Land scams, inflated tariffs
The study revealed corruption worth more than Tk249 crore linked to land acquisition and compensation in five renewable energy projects. It noted that several government-owned projects built on public land – where no acquisition costs should have been required – recorded installation costs of more than Tk14 crore per MW.
The report alleged that a coordinated syndicate involving officials from the Bangladesh Power Development Board (BPDB), land registration offices, sections of the local administration, and political figures benefited from these irregularities.
According to the findings, widespread malpractice included artificially inflating mouza land prices, reclassifying agricultural land to bypass regulations, and misusing the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 to sign power purchase agreements at tariffs reportedly up to four times higher than in neighbouring countries.
The study also documented cases of forced land acquisition, in which privately owned land was falsely labelled as public property. This led to evictions and, in some instances, landowners being pressured or intimidated into selling land at far below market value.
Policy and financial failures
TIB found that many contracts were denominated in US dollars, which has increased financial pressure following the depreciation of the taka. Some projects, the report said, also went ahead without obtaining mandatory environmental clearances.
Covering 14 renewable energy projects between October 2023 and November 2024, the study noted that delays in payments to private power producers had further weakened the confidence of foreign investors.
When asked about the prospect of cancelling controversial agreements, like the Adani power deal, Dr Iftekharuzzaman said immediate withdrawal would be difficult because of existing legal and financial commitments.
"Pulling out could lead to international arbitration, with outcomes that are uncertain," he said.
The report concluded that a lack of transparency and accountability remains the primary barrier to achieving Bangladesh's renewable energy targets.
"Without modern grid integration and adequate technical readiness, households do not find renewable energy convenient or financially viable," Iftekharuzzaman added.
