At the start of 2020, renewable energy constitutes 3% of Bangladesh’s electricity generation, with 600 MW installed – including 326 MW of solar power systems, the majority from small scale, rooftop systems. The Government aims to boost the share of renewable sources in its energy mix up to 10 percent of generation by 2021 and double it by 2030, counting on the development of large scale solar plants, having signed initial agreements for more than 1GW, but also energy efficiency, and wind.
Scatec Solar entered the market in 2017, exploring several potential locations for projects with offtake agreement from the Government.
The Nilphamari project was moved into backlog in 2019. The power plant will hold a 20 years PPA with the Bangladesh Power Development Board (BPDB). The agreed tariff is around 11 USD cents/kWh, paid in BTD and indexed to USD. Total project costs are estimated to USD 78 million, expected to be funded with 75% debt and 25% equity. Lenders have been selected and are mandated.
Scatec Solar will finance, construct, own and operate the project. The project is being developed with a local development partner. FMO, the Dutch development bank, has also joined as development partner, covering 50% of development costs. In addition, Norad, the Norwegian Agency for Development Cooperation is providing a development grant for the project.