Renewable energy sector: Tk 200cr unused fund goes back
Creation of SREDA may change things, officials hope
Reported by: Sadrul Hasan, UNB Staff Writer
Reported on: June 05, 2012 17:30 PM
Reported in: National
Reported on: June 05, 2012 17:30 PM
Reported in: National
Dhaka, June 5 (UNB) – A block allocation of Tk 200 crore of the outgoing fiscal year (2011-12) for the renewable energy sector has gone back due to its non-utilisation.
Finance Ministry officials blamed the ‘lack of placement of demand from different ministries’ for the non-utilisation of the allocated fund. “As of June, an amount of Tk 37,00,000 from the allocated fund was spent by one or two ministries,” one official told UNB.
Sources, however, said most of the ministries showed little interest to use the renewable energy fund as they think the solar power sectors projects are less important compared to their other projects.
“Secondly, there’re certain procedures to be followed by the ministries to get the fund which they do not want to,” said an official who has been working in a renewable energy project in the Power Ministry.
He, however, said the fund is likely to be reallocated for the coming financial year 2012-13 and they hope this time it will be utilised because of creation of a new organisation to deal with renewable energy.
According to him, the government has moved to create Sustainable and Renewable Energy Development Authority (SREDA) under the Power Ministry. The cabinet has already approved the concept of SREDA and it is expected that a bill will be passed in the current session of parliament.
When SREDA will work in full-swing, all renewable energy projects will come under one umbrella and the fund all be utilised as per its approval.
At present, a number of ministries, including Power, LGRD, Education, Religious Affairs and Social Welfare, are implementing different projects on their own without any coordination.
“As a result, projects cannot maintain due standard and quality and there is no agency to monitor post-implementation stages of the renewable energy projects,” said the official of the renewable energy development project in the Power Ministry.
Many NGOs and private sector organisations are seeking funds from the government with soft interest to implement solar power projects in the country’s off-grid areas where only the solar power is the solution to electricity crisis.
Officials hope that the NGOs and private sector organisations will get better scope to work in renewable energy sector after the creation of SREDA.
Power Division officials said if the government wants to install 500-MW power plant from solar system out of the total 750 MW of renewable energy, it needs about US$ 1.5 billion which is equivalent to Tk 13,000 crore in the next three years.
But, only Tk 200 crore budget allocation for the renewable energy sector is insignificant. The government is only implementing a project through the Infrastructure Development Company Limited (IDCOL) to generate renewable energy from solar home system and biomass plants.
Under this project, so far about 1.5 million solar home systems have been introduced in rural off-grid areas that generate about 55 MW of power.
But the Bangladesh Solar and Renewable Energy Association (BSREA), which represents the renewable energy sector investors, thought the government’s plan will not be implemented unless there is specific action programme from the government side.
They said the government should allocate Tk 1650 crore, which Bangladesh will derive as climate change mitigation fund, to promote renewable energy. They also suggested the government for creating another fund of Tk 1000 crore from the Bangladesh Bank for providing soft loan to promote private investment in the renewable energy sector.
Senior Vice President of BSREA and Managing Director of Rahimafrooz Renewable Energy Limited Munawar Moin said after the success of solar home system in Bangladesh, now the government should move for solar irrigation system.
He said there are immense and significant opportunities for introduction of solar mini-grid, solar rooftop systems in Bangladesh perspectives. “If we get the government support, the private sector could mobilise a significant part of the required fund.”
Moin said introduction of solar irrigation system can save US$ 100 million of subsidy in diesel and produce 1600 MW of electricity if the government moves for this renewable energy.
Meanwhile, the government has outlined a plan to produce 500 MW of solar power in the next three years as part of its design to increase the renewable energy’s share to 5 percent of total power generation by 2015 from the present less than 2 percent.
The government envisages increasing power generation to 15,000 MW by 2015 from 5,000 MW in 2012. This means the power generation from renewable energy should be increased to 750 MW from the present less than 100 MW.
As per the plan, about 650 MW of renewable energy should come in the next three years, but the government’s plan is to generate 500 MW from solar system.
Renewable energy comes from mainly solar, biomass, wind and some other sources. But presently, the solar system is getting popularity because of its easy and available installation system.
Finance Ministry officials blamed the ‘lack of placement of demand from different ministries’ for the non-utilisation of the allocated fund. “As of June, an amount of Tk 37,00,000 from the allocated fund was spent by one or two ministries,” one official told UNB.
Sources, however, said most of the ministries showed little interest to use the renewable energy fund as they think the solar power sectors projects are less important compared to their other projects.
“Secondly, there’re certain procedures to be followed by the ministries to get the fund which they do not want to,” said an official who has been working in a renewable energy project in the Power Ministry.
He, however, said the fund is likely to be reallocated for the coming financial year 2012-13 and they hope this time it will be utilised because of creation of a new organisation to deal with renewable energy.
According to him, the government has moved to create Sustainable and Renewable Energy Development Authority (SREDA) under the Power Ministry. The cabinet has already approved the concept of SREDA and it is expected that a bill will be passed in the current session of parliament.
When SREDA will work in full-swing, all renewable energy projects will come under one umbrella and the fund all be utilised as per its approval.
At present, a number of ministries, including Power, LGRD, Education, Religious Affairs and Social Welfare, are implementing different projects on their own without any coordination.
“As a result, projects cannot maintain due standard and quality and there is no agency to monitor post-implementation stages of the renewable energy projects,” said the official of the renewable energy development project in the Power Ministry.
Many NGOs and private sector organisations are seeking funds from the government with soft interest to implement solar power projects in the country’s off-grid areas where only the solar power is the solution to electricity crisis.
Officials hope that the NGOs and private sector organisations will get better scope to work in renewable energy sector after the creation of SREDA.
Power Division officials said if the government wants to install 500-MW power plant from solar system out of the total 750 MW of renewable energy, it needs about US$ 1.5 billion which is equivalent to Tk 13,000 crore in the next three years.
But, only Tk 200 crore budget allocation for the renewable energy sector is insignificant. The government is only implementing a project through the Infrastructure Development Company Limited (IDCOL) to generate renewable energy from solar home system and biomass plants.
Under this project, so far about 1.5 million solar home systems have been introduced in rural off-grid areas that generate about 55 MW of power.
But the Bangladesh Solar and Renewable Energy Association (BSREA), which represents the renewable energy sector investors, thought the government’s plan will not be implemented unless there is specific action programme from the government side.
They said the government should allocate Tk 1650 crore, which Bangladesh will derive as climate change mitigation fund, to promote renewable energy. They also suggested the government for creating another fund of Tk 1000 crore from the Bangladesh Bank for providing soft loan to promote private investment in the renewable energy sector.
Senior Vice President of BSREA and Managing Director of Rahimafrooz Renewable Energy Limited Munawar Moin said after the success of solar home system in Bangladesh, now the government should move for solar irrigation system.
He said there are immense and significant opportunities for introduction of solar mini-grid, solar rooftop systems in Bangladesh perspectives. “If we get the government support, the private sector could mobilise a significant part of the required fund.”
Moin said introduction of solar irrigation system can save US$ 100 million of subsidy in diesel and produce 1600 MW of electricity if the government moves for this renewable energy.
Meanwhile, the government has outlined a plan to produce 500 MW of solar power in the next three years as part of its design to increase the renewable energy’s share to 5 percent of total power generation by 2015 from the present less than 2 percent.
The government envisages increasing power generation to 15,000 MW by 2015 from 5,000 MW in 2012. This means the power generation from renewable energy should be increased to 750 MW from the present less than 100 MW.
As per the plan, about 650 MW of renewable energy should come in the next three years, but the government’s plan is to generate 500 MW from solar system.
Renewable energy comes from mainly solar, biomass, wind and some other sources. But presently, the solar system is getting popularity because of its easy and available installation system.
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