Power, Energy and Mineral Resources Adviser Fouzul Kabir Khan has said that ensuring uninterrupted cash flow is now the government’s highest priority in order to draw new investment into Bangladesh’s renewable energy sector.
Speaking at an online dialogue titled “Recent Procurement Initiatives of Renewable Energy in the Power Sector: CPD Study Findings”, organised by the Centre for Policy Dialogue (CPD) at BRAC Inn on Monday, Fouzul defended the government’s recent decision to scrap Implementation Agreements (IAs) for 34 solar power plants.
He argued that the IA framework has become obsolete, saying, “The Implementation Agreement is cheaper than the paper it is written on. Nobody even demanded to invoke it. We revoked the IA with good conscience.” Both the PPA and IA structures were designed in the 1990s and no longer reflect the realities of today’s renewable energy market, he added.
Explaining the policy shift, the adviser said that investment decisions ultimately hinge on assured revenue streams. “For an investor, it is cash flow and cash flow. For mutual benefit and long-term sustainability, ensuring cash flow is essential. We are prioritising cash flow so that both cost and revenue sides remain viable,” he said.
Fouzul Kabir also confirmed that the government is moving towards direct procurement for upcoming renewable energy purchases. Discussions with banks and IDCOL are underway to make future projects bankable, he said. “We have already informed the Banking Division to provide needed facilities, and we are trying to secure guarantee programmes from IDCOL.”
The adviser pointed to long-standing structural weaknesses in the power sector, noting that dependence on unsolicited deals and direct negotiations in the past had created a “vicious circle” of inflated tariffs and mounting unpaid bills. “All unsolicited power deals carried high tariffs. Because of these tariffs, BPDB could not pay, which created outstanding bills,” he said.
He added that the interim government has already cleared $3.2 billion in unpaid energy import bills after taking office, as delays had resulted in suppliers imposing penalties and higher charges.
According to him, new solar projects with significantly lower tariffs have already been forwarded to the purchase committee for approval, marking a break from previous practices. “We are trying to transition from a corrupt process and move away from the 2010 Power and Energy Act,” he said.
Fouzul Kabir also noted that confusion persists around PPAs and IAs because the sector has relied on those outdated frameworks for decades.