Tariffs have been approved for 12 new solar power plants with a combined capacity of 918 megawatts to increase solar power generation in the country. The generation costs of these power plants, approved by Advisory Council Committee on Government Purchases on December 9, are lower compared to previous years. The projects were approved through open tendering, and the average tariff for these plants stands at 7.80 cents per kilowatt-hour — roughly 2.5 cents lower than the rates offered by the solar plants under the special law. Previously, the average approved tariff for solar power hovered around 10.50 cents. As a result, the Bangladesh Power Development Board (BPDB) is now set to buy solar electricity at more competitive prices, despite the absence of sovereign guarantees that were once standard for such projects.

A sovereign guarantee means the government formally assumes responsibility for a company’s loan obligations — ensuring lenders that, if the company fails to repay, the government will. These guarantees were widely used in large-scale power projects, especially those involving foreign loans or investments, including renewable energy and import-based projects. But after the interim government scrapped the special law, it also decided that no forthcoming power project would receive a sovereign guarantee. Especially, all renewable projects tendered since then have proceeded without such government backing.

The government aims to add roughly 5,500 MW of renewable power to the national grid to increase renewable electricity in the country. Earlier, during the Awami League’s tenure, 37 solar projects received Letters of Intent (LoIs). However, with the repeal of the special law, all those projects were cancelled. During the previous Awami League tenure, an analysis of the LoI-era tariffs shows that solar electricity averaged 10.47 cents per kilowatt-hour. In comparison, tariffs approved recently through open competition average 7.80 cents — a reduction of 2.67 cents.

Experts say that although foreign participation in the open tender system is low, such a procedure has enabled local companies to offer significantly lower prices, which were not available earlier under special low prices. The implementation process of these projects will be accelerated if the government encourages and supports project developers.

The approved per-unit generation costs for the 12 solar plants range from 6.50 cents to 8.13 cents. Based on the Bangladesh Bank’s USD exchange rate as of yesterday (USD 1 = BDT 122.24), the lowest tariff is BDT 7.94 per kWh, the highest tariff is BDT 9.93 per kWh, and the average tariff is BDT 9.53 (7.80 cents) per kWh. Previously, under the special law, the average tariff translated to over BDT 12.79 (10.47 cents) per unit.

Two senior BPDB officials, speaking on condition of anonymity, told Bonik Barta, “The priority in open tendering was to secure the lowest generation cost. Many price ranges are offered, and the contracts were made based on the lowest bids. If these plants are executed on schedule, solar power can be bought at the lowest prices. More power plants will be approved through open tenders in phases.”

Confidence Group won a combined 400 MW of projects, both independently and in joint ventures. BPDB will purchase electricity worth approximately BDT 157.78 billion over 20 years from just three of these projects. The plants will be set up in Chattogram, Cox’s Bazar, and Bagerhat. Senior officials of the company believe that the government will get electricity at an affordable price if these competitive projects are implemented soon.

When asked about the matters, Confidence Group Chairman, Imran Karim, told Bonik Barta, “This year’s solar tender process was extremely transparent and highly competitive. A total of 918 MW has been cleared. Government cooperation is essential for moving these projects forward. Then the project work will be completed within the due time. We will now wait for the LoI and proceed with financing accordingly.”

Confidence Power Holdings Ltd. is set to build a 200-megawatt solar power plant in Fatikchhari, Chattogram. Once operational, BPDB will purchase electricity worth over BDT 76.93 billion over a 20-year period. Advisory Council Committee on Government Purchase has approved the plant’s levelised tariff at 7.75 cents per kilowatt-hour — equivalent to BDT 9.48 per unit.

Confidence Power will also develop another 100 MW solar plant in Khuntakhali of Chakaria, Cox’s Bazar. BPDB will buy electricity from this plant for 20 years at a total cost of over BDT 40.43 billion. The committee approved a tariff of 8.09 cents per kilowatt-hour (BDT 9.89 per unit) on December 9.

In a joint venture, Confidence Power Bogura Unit-2 Limited and Asian-Entech Power Corporation Limited will construct a 100 MW (AC) solar plant at Burrirdangga in Mongla, Bagerhat. BPDB’s total electricity purchase cost over 20 years is projected at around BDT 41.40 billion. The approved tariff is 8.09 cents per kilowatt-hour (BDT 9.89 per unit).

The committee has also cleared a 150 MW solar plant in Pabna, to be built jointly by Paramount Textile Ltd (PTL) and Paramount Holdings Ltd (PHL). BPDB will procure electricity worth about BDT 63.21 billion from the plant over 20 years. The approved levelised tariff is 7.89 cents per kilowatt-hour (BDT 9.66 per unit).

PTL and PHL will jointly build another 25 MW solar power plant in Moulvibazar. BPDB will purchase electricity worth about BDT 10.06 billion. The approved tariff is 7.64 cents per kilowatt-hour (BDT 9.34 per unit).

The same partnership, PTL and PHL, will develop a 70 MW (AC) solar plant at Hemayetpur in Pabna. BPDB will buy electricity worth around BDT 29.50 billion over 20 years. The approved tariff stands at 7.90 cents per kilowatt-hour (BDT 9.66 per unit).

Maheen and Vidulanka, in a joint venture, will build a 10 MW solar plant at Sudharam in Noakhali. BPDB will purchase electricity worth around BDT 3.93 billion. The approved tariff is 7.49 cents per kilowatt-hour (BDT 9.16 per unit).

A consortium of FGL, FHL, and GBB will set up an 18 MW solar power plant in Hathazari, Chattogram. BPDB will procure electricity worth over BDT 7.58 billion. The tariff has been set at 7.97 cents per kilowatt-hour (BDT 9.74 per unit).

In Fatikchhari, Chattogram, the Karnaphuli-Infraco Consortium has received tariff approval for a 45 MW solar power plant. BPDB will purchase electricity worth approximately BDT 16.98 billion. The approved tariff is 7.77 cents per kilowatt-hour (BDT 9.50 per unit).

Concord Pragatee Consortium Limited will build a 50 MW solar plant in Jaldhaka, Nilphamari. BPDB will buy electricity worth BDT 21.63 billion. The approved tariff is 8.40 cents per kilowatt-hour (BDT 10.27 per unit).

A joint venture between China Northeast Electric Power Engineering & Services and BM Star Trade Ltd (JV of NEPCS-BMST) will construct a 100 MW solar plant in Joaria of Ramu, Cox’s Bazar. BPDB will buy electricity worth BDT 34.91 crore from the plant. The approved tariff is 6.50 cents per kilowatt-hour (BDT 7.95 per unit).