A joint venture led by Saudi-based ACWA Power Company is setting up Bangladesh's largest solar power plant in Rampal upazila of Bagerhat with an investment of $430 million.
The Bangladesh Power Development Board (BPDB) will provide the land adjacent to the Rampal coal-fired power plant for the solar plant that will generate 300MW of electricity, sources said.
Two private sector companies in Bangladesh – Comfit Composite Knit Ltd and Viyellatex Spinning Ltd – will also invest in the plant, which will run on the build-own-operate method.
ACWA Power, the world's largest private-sector power company, will hold a 51% share in the power plant.
Sources in the finance ministry have indicated that the tariff proposal for the establishment of this power plant might be approved during today's (30 August) meeting of the Cabinet Committee on Government Procurement. Finance Minister AHM Mustafa Kamal is expected to chair the meeting.
ABM Ziaul Haque, chief engineer (Private Generation) at BPDB, acknowledged to have received such a proposal recently.
"Now it is being examined by the BPDB chairman's wing," he told The Business Standard.
Power Division officials have stated that the BPDB has the land for the potential establishment of an additional coal-based power plant adjacent to the Rampal coal-based power plant. The 300MW solar power plant needs 900 acres of area and will be constructed on that plot of land.
Largest solar plant in Bangladesh
Kawsar Ali, chief operating officer at Comfit Composite Knit Ltd, said, "It will be the largest solar power plant in Bangladesh. We are investing in this plant in partnership with the BPDB and ACWA Power Company."
He said Comfit Composite Knit's textile factories are green and platinum-certified.
"We have already invested in the gas and furnace oil-based Shahjibazar Power Plant and Midland Power Plant, which together generate 350MW. The company is also increasing its investment in renewable energy," he told TBS.
According to officials, Saudi Arabia's ACWA Power is the world's largest electricity company and currently generates about 56,000MW of electricity.
ACWA Power signed a memorandum of understanding with the BPDB in November last year to establish a 1,000MW solar power plant in Bangladesh.
Also, the Saudi company wants to invest $2.5 billion in Bangladesh to build a gas-run plant capable of generating 3,600MW electricity. It signed a MoU with the BPDB for the development of a natural gas/R-LNG-based combined cycle power plant on 17 October 2019.
Officials at Comfit Composite Knit Ltd and Viyellatex Spinning Ltd said that ACWA Power will be the lead partner and investor in the 300MW solar power plant in Rampal.
The officials, however, declined to give any information about the ownership shares of the BPDB and two domestic private companies.
Will take 2.5 years to implement
According to an official involved with the process, it will take about two and a half years from now to implement the project and go into production. After the completion of the first phase of the power plant, there are plans to set up another 400MW solar power plant in the second phase at the same location.
To prevent the negative effects of climate change, the government has announced that it will not build new coal-based power plants. Recently, the government has given importance to renewable energy and solar power in the context of an increase in the price of energy in the international market.
Last month, Prime Minister Sheikh Hasina inaugurated the 200MW Teesta Solar Plant, which is the largest solar power plant in Bangladesh so far.
Beximco Power Limited, an associate company of Beximco Group, has built this plant in Sundarganj Upazila of Gaibandha.
Besides, a solar park has been built on 350 acres of land in Rampal by Energy Renewables, an associate company of Orion Group. From this park, 134.3 MW of peak (solar energy measuring unit) electricity is being supplied to the national grid.
Govt targets 10% power from solar
The government is chasing a target of 10% electricity generation from renewable sources, including solar, hydro, and wind, by 2025.
According to the Bangladesh Power Development Board, the country currently has 2% of its electricity generation capacity from renewable sources. Achieving the Sustainable Development Goals, or SDGs, requires at least 12% of electricity from these sources.
According to data from the BPDB, the production cost per unit of electricity in the country's diesel-powered plants is Tk22.
The cost of generating electricity from LNG is Tk10 per unit; from local coal in Barapukuria, it is Tk4 per unit; from imported coal, it is Tk6 per unit; and from furnace oil, it is Tk12 per unit. However, these sources of electricity are not environmentally friendly.
The production cost per unit of solar power in Bangladesh is Tk8-10. The cost at the country's only hydropower plant in Kaptai ranges from Tk0.30 to Tk1, depending on the season.