Mohammad AlauddinJoint SecretaryPower Division

Ministry of Power, Energy & Mineral ResourcesGovernment of the People’s Republic of Bangladesh

03 August 2015

Workshop on financing for RE in SIDsSharing Bangladesh Experience

Outline of Presentation

Bangladesh : An Overview

Renewable Energy

Bangladesh’s Success Story: IDCOL’s Solar Home System[SHS]

Total Area: 147,570 km²

Population :157 Million

GDP/Capita: US$ 1314 (FY 2014-15 )

GDP Growth Rate 6.12

Installed Generation Capacity: 11265 MW

Per Capita Electricity Generation: 371kWh

Access to Electricity : 74% [10% RE ]

Source : Finance Division, Ministry of Finance & Power Division

Bangladesh: Country Profile

c

6,765W

18,838MW

33,708MW

2011

Gas67%

Oil 27%

Coal 3%

Generation Capacity 7169 MW

2021

Gas51%

Generation Capacity 24000 MW

Coal 22%

Others 16%

Oil 11%

2030

Generation Capacity38,700 MW

Coal50%

Nuclear 10.34 %

Others 17%

“Others” including

Renewable Energy , Regional

power and oil

Gas/LNG23%

Demand & Generation Capacity Forecast

Source : Power System Master Plan [PSMP] 2010

Demand MW

Renewable Energy: Achievement

Category Achievement

Solar Home System(SHS) 150 MW

Solar PV Applications (Office Buildings & Commercial Buildings)

04 MW

Solar PV System for new connections 11 MW

Solar Irrigation 01 MW

Wind 1.9 MW

Biomass & biogas based electricity 07 MW

Hydro 230MW

Total 405 MW

Source : Power Division

Renewable Energy Policy of Bangladesh 2008

Challenges

• High initial capital costs & lengthy rate of return

• Lack of standards & quality control for RE equipment

• Lack of information about RE resources & RETs

• The high upfront cost at the end user level for renewable

energy is a major barrier.

• Lack of expertise & services in system design, installation,

O & M of RETs & limited capacity for project development

Bangladesh’s Success Story: IDCOL’s SHS Program

Program Target : 6 million SHS by 2018

Program Achievement : 3.64 million SHS by April 2015

Power Generation : 142 MW

Fossil Fuel Saving : 200,000 ton/year

Job Creation : 70,000 people

IDCOL Investment : About USD 600 million

Source: Infrastructure Development Company Limited

Program Structure

Supply Equipment

Pay for Equipment

Seeks grant & loan

Provide grant & loan

IDCOL

Technical Standards Committee

SuppliersSeeks approval

Provides approval

Household

Sells SHS & provide service

Pay down-payment & installment

Operations Committee

NGO/POPO Selection Committee

Select POs

Applies

Dev. Partner

Grant & soft term

credit

Fund Flow & Role of Partners

Multilateral Agencies

• Provides grant and soft loans

• Provides technical assistance needed

GoB IDCOL

• Provides grants to reduce SHS cost and for capacity building

• Provides soft loans

• Provides training, promo support

• Monitors implementation

PO

• Identify potential customers

• Installs SHS

• Extends micro-credit

• Provides after sales services

Household

Debt ServiceDebt ServiceDebt ServiceDebt Service

• Provides

grant and

soft loan to

IDCOL

• Provides

policy

support

• Maintain

system

• Repay loan

in monthly

installments

Mode of Financing: An Example

9/16/2015

(a) Market Price of 20 Wp SHS (USD 170 /SHS) BDT 13,600

(b) Buy-down Grant (Grant A) (USD 20/SHS) BDT 1600

(c) System Price for Household [(a)-(b)][USD150] BDT 12,000

(d) Down Payment from Household to PO [15% of (c)][USD 22.5] BDT 1,800

(e) Loan Payable from Household to PO [(c)-(d)][127.50] BDT 10,200

Loan Tenor 3 years

Interest Rate 12-16% p.a.

Monthly Installment Amount [USD 4.375] BDT 350

(f) IDCOL Refinance [80% of (e)] [USD 102] BDT 8,160

Loan Tenor 5~7 years

Interest Rate 6~9% p.a.

SL# Type of Project Capacity (MW)

1. Solar Irrigation 150

2. Solar Minigrid 25

3. Solar Park 135

4. Solar Roof-top Residential & Commercial Building

10

20Industrial Building

Total 340

September 16, 2015

500 MW Solar Program

SL# Type of Project Capacity (MW)

1. Rural Health Centers 50

2. Remote Educational Centers 40

3. Union e-Centers 7

4. Religious Establishments 12

5. Remote Railway Stations 10

6. Government & Semi-government Offices

41

Total 160

September 16, 2015

500 MW Solar Program