Bangladesh Country Presentation at ACEF 2014
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- Bangladesh faces challenges in expanding energy access, with 38% lacking electricity and 90% relying on traditional cooking fuels. The government has adopted plans to achieve universal electricity access by 2021 and increase renewable energy. - Significant progress has been made through programs installing solar home systems, biogas digesters, and clean cookstoves. Planned projects include large solar parks, mini-grids, solar irrigation, and wind power. - An investment prospectus is being developed through a multi-stakeholder process to attract financing for renewable energy and energy access projects proposed by the private sector and NGOs. The first round of projects submitted range from $750,000 to $120 million.
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Bangladesh Country Presentation at ACEF 2014
- 1. Progress and Future Plans for SE4ALL in Bangladesh Md. Nazrul Islam Joint Chief, Power Division Ministry of Power, Energy and Mineral Resources & M. Saifullah Panna Sr. Assistant Secretary, Finance Division Government of Bangladesh 17 June 2014
- 2. Energy Access Need • The Government of Bangladesh has worked for over a year with the United States and international partners to develop an action oriented program to advance the three SE4ALL objectives: energy access, energy efficiency and renewable energy. • Bangladesh faces tremendous pressure to expand energy supply with a rapidly growing economy and population nearing 160 million. • Bangladesh has made significant progress in expanding access but still has a way to go as 38% of the population does not have access to electricity and 90% relies on traditional fuels for cooking. 2
- 3. Energy for All Vision • The Government adopted Vision 2021 - an “electricity for all” plan that largely relies on conventional fuels. • The Government is promoting a renewable energy target of at least 5% power from renewable sources by 2015 and 10% by 2021. • The Government has set energy efficiency targets of 10% by 2015, 15% by the 2021, and 20% by 2030. • A feed-in tariff for renewable energy is under development. 3
- 4. Major Achievements • Infrastructure Development Company Limited (IDCOL) has spearhead government and donor efforts to achieve: – Almost 3 million SHSs installed; over 70,000 /month – 36,000 biogas digesters built – 38 solar pumps in operation, 150 approved, 1,500 targeted – 1 million cookstoves targeted by 2017 • The Sustainable and Renewable Energy Agency (SREDA) has been formalized in law and is being set-up. 4
- 5. Planned Renewable Energy Projects Technology Summary Solar Park (Grid Tied) 8 systems with 160 MW total capacity Solar Park (Mini Grid) 7 systems from 100 kW to 7 MW - solar and hybrid Solar Irrigation Program by IDCOL and projects by Rural Electrification Board and a private developer Solar Home System IDCOL SHS program and solar lanterns for poor Solar Roof-Top 3 grid-tied systems for government and public sector buildings Wind 6 projects under development and wind mapping at another 13 sites 5
- 6. SE4ALL Development Process 6 Follow-on Work March 2013 Mission Established dialogue with government and private sector stakeholders Produced Aide Memoire Developed a preliminary Investment Prospectus Framework for each SE4ALL objective area November 2013 Mission Workshop with public and private sector stakeholders Identify/review details of potential projects for the Investment Prospectus Produced an Investment Framework document to define SE4ALL project types and request project proposals for the Investment Prospectus July 2013 Mission Continued dialogue with stakeholders and discussed Investment Prospectus Framework Reviewed and revised Investment Prospectus Framework for Bangladesh Designed a process for developing the Investment Prospectus and started due diligence on potential projects Activities Outputs May 2014 Mission Met with project proponents to collect/validate information received Evaluated project opportunities for the Investment Prospectus Prepared draft Investment Prospectus for review by stakeholders
- 7. Critical Process Steps • SE4ALL Team: U.S. Government lead, World Bank, ADB, German Government, IFC, UNDP • SE4ALL Team coordinating with: Government of Bangladesh, IDCOL, GIZ and many private-sector and NGO stakeholders. • The Aide Memoire identified key focal areas for SE4ALL activities. • Development of the Investment Prospectus Framework provided public and private stakeholders with: 1. A list of potential SE4ALL investment opportunities for each focal area 2. A template for proponents to submit project proposals 3. Opportunity to provide inputs through focal area roundtable discussions with all stakeholders 7
- 8. First Round of Projects Twenty projects were submitted – all are in the due diligence stage – the furthest along are: • Clean Cooking – two projects that are first of their kind in the country • Third Generation SHS upgrades – expansion of successful program • Mini-grids – three projects ranging from 3kw to 100kw • Waste to Energy and organic fertilizer • LED manufacturing facility • Brick kiln technology upgrade 8
- 9. Overview of First Round Projects • 17 projects were submitted by the private sector, 2 by NGOs, and 1 by an independent state owned non-bank financial institution • Financing requirements range from $750,000 to $120 million • Targeted investors are venture capitalists, impact investors, development finance institutions, commercial banks and program related investment of foundations. 9
- 10. Critical Issues Going Forward • Confidentiality is critical to the process, and there has been an undertaking by the SE4ALL project team only to share detailed information with potential investors. • On-going work includes identifying and holding discussions with potential investors (“match-making”), talking to government agencies about reducing barriers, and talking to financial agencies about de- risking mechanisms. • The process is a pipeline for opportunities as they become ready rather than formal request for proposal process. 10
- 11. Development Steps Going Forward Follow-on Work Fall 2014 Mission 1st Bangladesh-specific Investor Forum to present opportunities identified in the Investment Prospectus Match interested investors with specific opportunities Develop approaches to address barriers and provide support to interested investors On-Going Continue to review projects and discuss with appropriate investors Create draft Investment Prospectus and plan for Investor Forum in coordination with ADB Finalize and distribute Investment Prospectus and start organizing Investor Forum Activities Outputs Follow-up workshops with public and private sector stakeholders 11
- 12. Why invest in Bangladesh? • Project agreements are of international standard with properly allocated risks. • IPPs are operating about 50 % of total generation and making profit. • IPPs and BPDB (power purchaser) have met their obligations under the PPA without problems or controversy. • Many IPPs are operating their businesses with local managers, engineers, and technical staff to the benefit of all concerned. • One stop service in Board of Investment (BOI) for licensing and permits. • Independent Regulator to protect industry and consumer’s interest. 12
- 13. Thank you Md. Nazrul Islam [email protected] 13
Editor's Notes
- #2: Read (or paraphrase) the following: I want to thank the organizers for this opportunity to tell you about both the progress and the remaining challenges to achieving energy access for all in Bangladesh.
- #3: Read (or paraphrase) the slide. Add: A commendable Rural Electrification Program exists, but generating capacity is insufficient to expand access, and most rural cooperatives (PBS) require a subsidy. The government has executed several tariff-based IPPs in the last decade, and IPPs now operate about 50 % of total generation. In partnership with the World bank and several other donors, the government has implemented a highly successful micro-credit based solar home system (SHS) program over the past 8 years with over 2.98 million household systems installed to date.
- #4: Read (or paraphrase) the slide.
- #5: Read (or paraphrase) the slide.
- #6: Read the following: The government plan for renewable energy includes a variety of gird-connected, mini-grid, solar irrigation, roof-top and wind projects in addition to continuation of the very successful solar home system program. The government and local developers are looking for additional financial support to achieve this plan.
- #7: Read the following: The SE4ALL team has made 4 missions to Bangladesh over the past year, with specific outputs and follow-on activities from each mission, leading to an initial set of project proposals for financing. Our process has been a step-wise approach to building government and private sector stakeholder understanding and interest in the SE4ALL process.
- #8: Read the slide.
- #9: Read or paraphrase slide.
- #10: Read or paraphrase slide.
- #11: Read (or paraphrase) slide. Add: SE4ALL is looking for projects that meet these criteria: Commercial viability or strong potential for commercial viability Demonstration effect and the potential to scale-up Competence of project proponents and track record in project implementation
- #12: Read (or paraphrase) the following: In addition to the on-going matchmaking work, the SE4ALL team is coordinating with ADB to hold the first Investor Forum in the fall of this year.
- #13: Read (or paraphrase) the slide. Add the following: Bangladesh is among seven ‘hottest’ emerging markets - Investors Chronicle Bangladesh is named as one of the ‘Frontier Five’ - JP Morgan