AK Khan to develop solar power plants with Norway's Scatec

Norway-based firm Scatec Solar and local conglomerate AK Khan & Company has signed an agreement to co-develop several large solar power projects in Bangladesh.

The first 100 megawatt project will be in northern Bangladesh and several procedures have to be completed before the signing of a power purchase agreement, according to a joint statement from the two companies.

The agreement was signed on February 20 in Dhaka in presence of visiting Norwegian Foreign Minister Børge Brende, State Minister for Power, Energy and Mineral Resources Nasrul Hamid and State Minister for Foreign Affairs Mohammed Shahriar Alam.

The deal comes at a time when the government is signing agreements with solar power plants to buy electricity with the view to ensuring a portion of supply of electricity through renewable sources.

The government aims to ensure 10 percent of the electricity requirement from renewable sources by 2020.

Bangladesh's present installed capacity is 15,351 MW, of which renewable sources account for nearly 3 percent, according to the ministry for power, energy and mineral resources.

“This agreement with the well-established local partner AK Khan & Company is important to succeed in our ongoing development of utility-scale solar in Bangladesh,” said Terje Osmundsen, senior vice-president of Scatec Solar.

Salahuddin Kasem Khan, managing director of AK Khan & Company, said they are happy to enter into a deal with a Norwegian firm to assist Bangladesh to achieve its goal of at least 10 percent of energy mix from renewable sources.

“This is a huge opportunity for our two companies to build a pipeline of solar energy,” he added.

Abul Kasem Khan, director of corporate investment of AK Khan & Company, said they want to go for joint venture to produce solar energy after sorting out some issues of the deal.

“We had the desire to go for solar. Scatec is a large company and they will have a positive impact on Bangladesh. It is a good branding for attracting foreign investment in Bangladesh.”

The power purchase agreement with the government is one of the main issues for establishing solar-based power plants. Another is availability of land.

“Land is a challenge and an opportunity,” he added.

Headquartered in Oslo, Scatec Solar is an integrated independent solar power producer. It builds, owns, operates and maintains solar power plants.

Already, it has an installation track record of close to 600MW. Currently, it is producing electricity from 322MW of solar power plants in the Czech Republic, South Africa, Rwanda, Honduras and Jordan, said the statement.

Founded in 1945, AK Khan & Company Ltd has a track of forming joint ventures with foreign companies.

The company has played a pioneering and leadership role by establishing financial institutions, deep sea fishing and telecommunication, said the press release.