Progress and Future Plans for SE4ALL in Bangladesh

Md. Nazrul IslamJoint Chief, Power Division

Ministry of Power, Energy and Mineral Resources&

M. Saifullah PannaSr. Assistant Secretary, Finance Division

Government of Bangladesh17 June 2014

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Energy Access Need• The Government of Bangladesh has worked for over a year with

the United States and international partners to develop an action oriented program to advance the three SE4ALL objectives: energy access, energy efficiency and renewable energy.

• Bangladesh faces tremendous pressure to expand energy supply with a rapidly growing economy and population nearing 160 million.

• Bangladesh has made significant progress in expanding access but still has a way to go as 38% of the population does not have access to electricity and 90% relies on traditional fuels for cooking.

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Energy for All Vision• The Government adopted Vision 2021 - an “electricity for

all” plan that largely relies on conventional fuels.

• The Government is promoting a renewable energy target of at least 5% power from renewable sources by 2015 and 10% by 2021.

• The Government has set energy efficiency targets of 10% by 2015, 15% by the 2021, and 20% by 2030.

• A feed-in tariff for renewable energy is under development.

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Major Achievements• Infrastructure Development Company Limited (IDCOL)

has spearhead government and donor efforts to achieve:– Almost 3 million SHSs installed; over 70,000 /month– 36,000 biogas digesters built– 38 solar pumps in operation, 150 approved, 1,500 targeted – 1 million cookstoves targeted by 2017

• The Sustainable and Renewable Energy Agency (SREDA) has been formalized in law and is being set-up.

Planned Renewable Energy ProjectsTechnology Summary

Solar Park (Grid Tied) 8 systems with 160 MW total capacity

Solar Park (Mini Grid) 7 systems from 100 kW to 7 MW - solar and hybrid

Solar Irrigation Program by IDCOL and projects by Rural Electrification Board and a private developer

Solar Home System IDCOL SHS program and solar lanterns for poor

Solar Roof-Top 3 grid-tied systems for government and public sector buildings

Wind 6 projects under development and wind mapping at another 13 sites

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SE4ALL Development Process

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Follow-on Work

March 2013 Mission

Established dialogue with government and

private sector stakeholders

Produced Aide Memoire

Developed a preliminary Investment Prospectus Framework

for each SE4ALL objective area

November 2013 Mission

Workshop with public and private sector

stakeholders

Identify/review details of potential projects for

the Investment Prospectus

Produced an Investment Framework document to

define SE4ALL project types and request project

proposals for the Investment Prospectus

July 2013 Mission

Continued dialogue with stakeholders and discussed Investment

Prospectus Framework

Reviewed and revised Investment Prospectus

Framework for Bangladesh

Designed a process for developing the

Investment Prospectus and started due

diligence on potential projects

Activities

Outputs

May 2014 Mission

Met with project proponents to collect/validate

information received

Evaluated project opportunities for the

Investment Prospectus

Prepared draft Investment

Prospectus for review by stakeholders

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Critical Process Steps• SE4ALL Team: U.S. Government lead, World Bank, ADB,

German Government, IFC, UNDP• SE4ALL Team coordinating with: Government of Bangladesh,

IDCOL, GIZ and many private-sector and NGO stakeholders.• The Aide Memoire identified key focal areas for SE4ALL

activities.• Development of the Investment Prospectus Framework

provided public and private stakeholders with:1. A list of potential SE4ALL investment opportunities for each focal

area

2. A template for proponents to submit project proposals

3. Opportunity to provide inputs through focal area roundtable discussions with all stakeholders

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First Round of ProjectsTwenty projects were submitted – all are in the due diligence stage – the furthest along are:• Clean Cooking – two projects that are first of their

kind in the country• Third Generation SHS upgrades – expansion of

successful program• Mini-grids – three projects ranging from 3kw to

100kw• Waste to Energy and organic fertilizer• LED manufacturing facility• Brick kiln technology upgrade

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Overview of First Round Projects

• 17 projects were submitted by the private sector, 2 by NGOs, and 1 by an independent state owned non-bank financial institution

• Financing requirements range from $750,000 to $120 million

• Targeted investors are venture capitalists, impact investors, development finance institutions, commercial banks and program related investment of foundations.

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Critical Issues Going Forward• Confidentiality is critical to the process, and there has

been an undertaking by the SE4ALL project team only to share detailed information with potential investors.

• On-going work includes identifying and holding discussions with potential investors (“match-making”), talking to government agencies about reducing barriers, and talking to financial agencies about de-risking mechanisms.

• The process is a pipeline for opportunities as they become ready rather than formal request for proposal process.

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Development Steps Going Forward

Follow-on Work

Fall 2014 Mission

1st Bangladesh-specific Investor Forum to present opportunities

identified in the Investment Prospectus

Match interested investors with specific

opportunities

Develop approaches to address barriers and provide

support to interested investors

On-Going

Continue to review projects and discuss with appropriate

investors

Create draft Investment Prospectus and plan for

Investor Forum in coordination with ADB

Finalize and distribute Investment Prospectus and

start organizing Investor Forum

Activities

Outputs

Follow-up workshops with public and private

sector stakeholders

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Why invest in Bangladesh?• Project agreements are of international standard with

properly allocated risks.• IPPs are operating about 50 % of total generation and

making profit.• IPPs and BPDB (power purchaser) have met their

obligations under the PPA without problems or controversy.

• Many IPPs are operating their businesses with local managers, engineers, and technical staff to the benefit of all concerned.

• One stop service in Board of Investment (BOI) for licensing and permits.

• Independent Regulator to protect industry and consumer’s interest.

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Thank you

Md. Nazrul Islamnazrul_mosict@yahoo.com