Final decision pending as govt weighs avoiding waste of Tk 60–70cr spent on pumps and equipment; only 642 of 2,000 targeted pumps installed
The Planning Commission is seeking ways to keep a troubled solar irrigation project running instead of shutting it down, fearing that closure at this stage could waste tens of crores of taka already spent on pumps and equipment.
The Commission has asked the implementing agency, Bangladesh Rural Electrification Board (BREB), to explore how the ‘Agricultural Irrigation through Solar-Powered Pumps’ project can be continued, as the government is now putting greater emphasis on renewable energy.
However, no final decision has yet been made on whether or how the project will continue.
The issue came up at a meeting of the Planning Commission on Thursday, where officials examined BREB’s proposal for a third revision of the project, originally approved in 2018.
The latest proposal sought to reduce the target from 2,000 pumps to 650 and close the project in June 2026. But the Commission asked BREB to examine alternatives to closure.
“We’ve had detailed discussions on the project so that we can continue it to achieve its target as the present government now wants more solar energy,” said Mohammad Ashraful Islam, joint chief of the Industry and Energy Division of the Planning Commission.
The Commission also wants to avoid leaving the equipment and pumps already purchased under the project unused, he said.
“We also want to run the project as BREB could not give us a satisfactory answer with regard to what they will do with the equipment and pumps for which they have already spent Tk 60 to Tk 70 crore if the project is shut down abruptly,” Ashraful said.
Officials are now considering whether another agency, particularly the Bangladesh Agricultural Development Corporation (BADC), could be involved in running the scheme.
The final arrangement, including who will implement the project and how the additional costs will be met, is yet to be settled.
“We’ve asked BREB to bear a part of that money from its own fund and the rest can be compensated by the government. We’ll also discuss it with the Power Division as well to take any final decision on the project,” Ashraful said.
Only 642 pumps installed
The project was launched in 2018 to install 2,000 solar irrigation pumps with a combined capacity of 19.3 megawattsacross the country within two and a half years.
But after eight years, only 642 pumps have been installed, just about one-third of the original target.
The project has undergone several revisions and deadline extensions. Its proposed third revision would cut the target to 650 pumps and bring the estimated cost down to Tk 352.79 crore.
The Planning Commission’s assessment, however, found that the poor performance was rooted in weaknesses in the project’s original design rather than simply implementation delays.
The feasibility study did not adequately verify actual demand among farmers or the technical suitability of proposed sites before the 2,000-pump target was fixed.
Of 5,142 farmers who initially expressed interest, only 2,759 applied for allotment. Just 1,298 received allotment letters.
After a 10 percent down payment and other formalities were introduced, the number fell to 1,012. Site inspections subsequently found 125 locations unsuitable, while test boring ruled out another 154.
The number of viable beneficiaries eventually fell to 691. Another 41 farmers opted for refunds, leaving 650 sites, of which 642 have received pumps.
High cost made solar less attractive
The Commission also identified the project’s business model as a major reason for the poor response.
Farmers faced combined one-time and recurring liabilities of up to Tk 3.5 lakh, making the solar irrigation system expensive compared with alternatives available in some areas.
In several locations, farmers already had access to free or heavily subsidised irrigation services provided by BADC, reducing their incentive to adopt the solar system.
The project’s original design also did not allow solar pumps to be connected to the national grid or surplus electricity to be sold to it.
As grid electricity expanded into many project areas, the standalone solar model became less attractive.
The business model was subsequently redesigned to allow grid integration and sale of surplus power. But the change required additional approvals and implementation work, contributing to further delays.
Of the 642 installed pumps, only 369 have been connected to the grid. The remaining 273 are expected to be connected by June 2027.
That means the grid-integration work could continue even if the existing project formally ends, creating uncertainty over who would finance, monitor and maintain the remaining work.
Questions over implementing agency
The Commission’s review has also raised questions over whether BREB was the right agency to implement a project combining electricity generation with agricultural irrigation.
BREB is primarily a power distribution agency, while BADC has direct experience in agricultural irrigation.
Officials said the possibility of involving BADC was discussed at Thursday’s meeting. BADC, however, has sought additional charges for taking on the responsibilities.
The issue of financing those charges remains unresolved.
The project also required coordination among several agencies involved in agriculture, irrigation and power, while approvals from local irrigation committees and other authorities added to implementation complexity.
Cost revised repeatedly
The project was initially approved at Tk 407.20 crore in 2018.
Its second revision in 2023 raised the cost to Tk 594.52 crore. A special revision last year pushed the estimate to Tk 650.08 crore, mainly because of the depreciation of the taka.
The latest proposal cuts the estimated cost to Tk 352.79 crore, alongside the sharp reduction in the pump target.
As of May this year, Tk 201.69 crore had been spent, according to the Planning Commission’s working paper.
The project’s coverage has also been reduced from 200 upazilas in 22 districts across six divisions to 158 upazilas under the latest proposal.
The Commission’s review attributed the failure to a combination of factors, including inadequate demand assessment, high costs for beneficiaries, the inappropriate choice of implementing agency, delays in grid integration, dependence on multiple agencies and changes to the business model during implementation.
The Covid-19 pandemic and the Russia-Ukraine war also increased equipment costs and affected contractors’ financial and implementation capacity.
The Planning Commission is now weighing these shortcomings against the investment already made and the government’s renewed emphasis on renewable energy.
Rather than allowing the installed pumps and equipment to become stranded assets, officials want to examine whether the project can be reworked and continued under a more viable institutional and financial arrangement.