PPP solar plant planned in economic zone

Bangladesh has moved to build its first public-private partnership (PPP)-based solar power project in a special economic zone, as the government seeks to ease pressure from costly fuel imports and attract private investment into renewable energy.

The proposed project, planned at Sonagazi in Feni, aims to generate 130-140 megawatts (MW) of grid-tied solar electricity along with battery storage facilities on 412 acres of land owned by the Bangladesh Economic Zones Authority (Beza).

Officials unveiled the plan at a workshop in Dhaka yesterday, attended by representatives from the power division, Bangladesh Power Development Board (BPDB), Power Grid Bangladesh PLC (PGCB), development partners, and private investors.

Joining a workshop at the project site the same day, Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood said the government could announce an investment-friendly policy for the solar sector by June, expressing hope that the renewable energy sector could witness growth similar to the country’s garment industry.

The minister said the government will act as a facilitator and will provide support to do profitable business in this sector by formulating an investment-friendly policy very soon.

“The government may waive taxes on frames, photocells, batteries, and more, to reduce the business cost, enhance storage capacity and facilitate the solar energy business,” he said.

Bangladesh must now move toward a more balanced power generation mix, the ministry’s state minister Aninda Islam Amit said.

“Imported fuel will continue to have a role, but excessive dependence on imported energy exposes the country to international price shocks, foreign exchange pressure, and fiscal burden.” “The Sonagazi project is an important test case,” he said, adding that the project is also forward-looking because of the potential inclusion of battery energy storage.

It is located at the National Special Economic Zone, where Beza-owned land can be used for clean energy generation. The proposed project structure brings together the key institutions: Beza as land owner and project sponsor, BPDB as the offtaker, PGCB for grid evacuation, Power Division for policy support, Sustainable and Renewable Energy Development Authority (Sreda) for renewable energy policy coordination, and Public-Private Partnership Authority (PPPA) for PPP structuring and procurement support.

The initiative comes at a time when Bangladesh is struggling to expand renewable energy capacity despite repeated policy commitments, while dependence on imported fossil fuel continues to strain foreign exchange reserves and increase subsidy burdens.

Officials said the Sonagazi project would serve as a pilot model for utilising unused government land to attract private capital.

Beza Executive Chairman Ashik Chowdhury said procurement for the project could begin by August this year.

“Under the arrangement, the BPDB will act as the contracting authority and offtaker of the electricity generated from the plant,” he said.

The government approved new guidelines on April 7 for developing renewable energy projects on land owned by public agencies under the PPP model, according to officials. The project also received policy approval from the Advisory Committee on Economic Affairs in March last year.

The Asian Development Bank (ADB) will support feasibility studies, financial modelling, environmental impact assessments and tender assistance for selecting a private partner through international competitive bidding.