Cabinet okays 200MW solar power project
The Cabinet Purchase Committee yesterday approved a proposal for setting up a 200MW solar park in Teknaf of Cox's Bazar, the largest in the country, on a build-own-operate (BOO) basis with the private sector.
SunEdison Energy Holding (Singapore) Private Ltd, a subsidiary of American solar power giant SunEdison, will carry out the project as an independent power producer (IPP), as part of the government's mega plan to increase production of electricity.
The state-owned Power Development Board (PDB) will buy electricity from the project at 17 cents or Tk 13.26 per kilowatt hour (each unit) for 20 years. The government will have to spend about $1.1 billion, or Tk 8,595 crore.
The committee, with Commerce Minister Tofail Ahmed in the chair in the absence of prime minister and finance minister, also approved three public procurement proposals. These include extension of PDB's power purchase agreement with independent power producer NEPC to buy electricity from its 110MW dual-fuel plant for the next two years. Another is the tender proposal of the Rural Electrification Board (REB) to procure 9,350km of conductor, ACSR and Bare under its project to connect 1.8 million consumers.
The Eastern Cable will supply the products at a contract value of Tk 44.16 crore.
The Cabinet Purchase Committee is the highest cabinet body to approve such projects so far.
About the 200MW solar park, the officials said the plant would be set up on about 1,000 acres of non-agricultural land in the tourist district of Cox's Bazar.
PDB will purchase electricity from the project on a "No Electricity, No Payment" basis, meaning the project does not need to have any capacity payment guarantee.
The condition, however, applies to other IPP projects like rental and quick rental plants that use traditional fuels.
Officials said initially Teknaf of Cox's Bazar and Tentulia of Panchagarh had been shortlisted but the former was chosen at the prime minister's instruction. The Power Division's joint secretary and convener of the technical negotiation committee of the project, Siddique Zobair, said since Teknaf's land was mostly not used for agriculture, the committee recommended it.
Official sources said SunEdison, having experience of 2,000+MWp solar power projects in 25 countries, will implement the Teknaf project on a 75:25 debt-equity basis.
The US company submitted its proposal to the financing commitment from the Asian Development Bank and International Finance Corporation (IFC) of the World Bank Group for the project.
Official sources said the Power Division had advanced the SunEdison project under the Speedy Power and Energy Supply (Special Provision) Act to implement it expediently. According to them, the recent success in power generation under this provision prompted the government to go for implementing such solar IPP projects.
The sources said the total investment of these firms would be between $280 and $300 million. The private investors will arrange the required land for their respective projects.
The move for allowing IPP solar plants has been part of the government's plan to generate 24,000MW of electricity by 2021, the sources added. Special emphasis was laid on power production from non-conventional sources. It aims to increase the total solar power production by 5 percent by 2015 (meaning 800MW), and 10 percent by 2020 (2,000MW). The total solar power production in Bangladesh has not crossed 200MW yet.
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