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Solar Park: Utility Scale Solar Power Project Development

A S M Alamgir Kabir Chairman, BPDB


20 September, 2011
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Bangladeshs Power Sector: At a Glance (FY 2010)

Electricity Growth Generation Capacity Total Consumers Transmission Lines Distribution Lines Per Capita Generation Access to Electricity

: 10 % in FY-2010 (Av. 7 % since 1990) : 6984 MW (16 August, 2011) : 12.5 Million : 8,600 km : 2,75,000 km : 251 kWh (incl. Captive) : 50 %

Demand Supply Situation

Generation on Jan 6, 2009: 3268 MW (Capacity- 4931 MW) Generation: 5000 5300 MW (Capacity- 6984 MW) Highest so far: 5244 MW ( August 29, 2011) Gas shortage causes 400 - 600 MW less Power Generation Peak Demand: 6000 MW (with DSM) Load shedding up to 800 MW during hot summer days (with DSM) Shortage and unreliable power supply has constrained economic growth
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Power Generation Projects up to 2016


Calendar Year Wise Projects Completion (From 2010 to 2016)
YEAR 2010 (MW) 2011 (MW) 2012 (MW) 2013 (MW) 2014 (MW) 2015 (MW) 2016 (MW)

Commissi oned

TOTAL (MW)

Public Private Quick Rental

255 270 250

1107 105 1238

582 1319

1040 1134

1270 1053

450 1900

1500 1300

6204 7081 1488

Total

775

2450

1901 2174 2323 2350 2800 14,773

Public Sector : 6204 MW (comm: 360 MW, u/c: 1629 MW, Tender: 1425 MW); (42%) Private Sector : 8569 MW (comm:1463 MW, u/c: 1667 MW, Tender: 2639 MW); (58%)

January, 2011

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Power Generation Addition From Jan 09 to Aug. 11

Gen Addition Jan 09 Dec 09 : 356 MW

Gen Addition Jan 10 Dec 10 : 775 MW Gen Addition Jan 11 Aug 11 : 1048 MW Total Gen. Addition (Jan 09 Aug 11): 2179 MW

5 5

Successful Contract Signed since Jan 2009

Sl. Descript No. ion 01. 02. Private Sector Public Sector

No. of Contract 25 17

No. of Plant 27 17

Capacity (MW) 3020 1734

Commis . (MW) 1353 105

Total

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4754

1458

Out of 4754 MW, 1458 MW (18 Plants) already commissioned.

26 Projects with capacity 3296 MW under construction.

Projects Under Tendering Process: Contract within Next 6 Months


Sl. No

Description Public Sector Private Sector (IPPs) Total

No. of Projects 5 23 28

Capacity (MW) 1425 2639 4064

01. 02.

Renewable Energy Development in Bangladesh

Renewable Energy Policy envisions 5% of total power, i.e. at least 800 MW from renewable sources by 2015. Solar energy is the most proven source till date Private sector is the engine of growth in power sector development of Bangladesh Solar Park is the concept through which utility scale solar power project is to be developed through private sector
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Policy, Incentives and Security Mechanism for Investment in Private Power Projects

Private Sector Power Generation Policy

Tariff based bidding


Sovereign guarantee from the Government for obligations of Government entities through Implementation Agreement (IA) Assistance in getting clearances from various agencies Attractive incentive packages

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Major Incentives for IPPs

Exemption from corporate income tax for a period of 10 years. Plant and equipment (full value) and spare parts (10% of original plant cost) without payment of customs duties, VAT and any other surcharges. Repatriation of equity along with dividends.
Cont
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Major Incentives for IPPs..contd.

Tax exemption and repatriation facilities on royalties, technical know how and technical assistance fees Avoidance of double taxation on the basis of bilateral agreements The Bangladeshi currency, Taka is freely convertible for FDI Duty Exemption for Solar Panel
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Payment Guarantee

Implementation Agreement (IA) and PPA will ensure fair and reasonable risk allocation, and payment by the Purchaser is guaranteed by GOB Payments under the PPA will continue in the event of dispatch failure Payment under the PPA will be ensured by Letter of Credit Payment to Escrow Account ensures lenders re - payment
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Why invest in Bangladesh Solar Park ?


Projects will implemented on BOO basis IPPs are operating about 50 % of total generation and making profit; IPPs and BPDB have met their obligations under the PPA without problems or controversy and no conflict or major problems/issues have arisen Independent Regulation to protect Industry and Consumers interests Local engineers, technician and skill workers are available
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Solar Park Solar Park Demonstration Projects will be in nonagricultural lands Two types of Land will be used: - Government owned land - Railway owned Land. Power generated will be directly fed into the Grid on commercial basis Primarily 8 potential sites have been identified Estimated Development Target: 135 MW
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Solar Park at Govt. Land


Sl. No. 1. 2. 3. 4. Project Location Rajabarihat, Rajshahi PGCB Grid Sub-station Compound, Ishwardi, Pabna Rajshahi (Char area at the river Padma) Adjacent area near Bangabandhu Bridge Land available 52 Acres 18 Acres 500 Acres 150 Acres TOTAL Est. Gen. Capacity 15-20 MW 5-6 MW 150-160 MW 30-40 MW 200-226 MW
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Solar Park at Railway Land


Sl. No. 1. Location Azampur Railway Station, Dhaka Halishahar RTA, Chittagong Pahartoli Railway Station, Chittagong Kumira Railway Station, Chittagong Land available 52 Acres Est. Gen. Capacity 12-15 MW

2. 3. 4.

42 Acres 25 Acres 30 Acres TOTAL

8-10 MW 5-7 MW 6-8 MW 31-40 MW


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Implementation

To be implemented on BOO basis Contract period shall be 15-20 years IPP Operator will be selected through Competitive Bidding Power Purchase Agreement (PPA) between BPDB and IPP Operator Land Lease Agreement with IPP Operator

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Implementation Model: Government Land ADB & other DPs


Technical Assist.

BPDB
Selects

Solar Park IPP


[Equity Participation]

15 Yrs PPA

BPDB

Tariff

Guarantee Fee

PRG

PCG

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Implementation Model: Railway Land ADB & other DPs


Technical Assist.

BPDB
Selects

Solar Park IPP


[Equity Participation]

Land Lease Fee

15 Yrs LLA

Low Interest Credit

RAILWAY

15 Yrs PPA

BPDB

Tariff

Loan Repayment

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Summary of Project Financing

Sl. No.

Types

Est. Capacity (MW)

Est. Invest. Req. Mil. US$

Est. Loan Est. Equity Mil. US$ Mil. US$

1 2

Solar Park at Govt. Land Solar Park at Railway Land

115 20

546 95 641

382 (70%) 66.5 (70%) 448.5 (70%)

164 (30%) 28.5 (30%) 192.5 (30%)

Sub-total 135 MW

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Site Details

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Rajabarihat, Rajshahi

Land available
.

: 52 Acres

Land Status: - Land is under Ministry of Fisheries and Livestock - Land uncultivated since 1988 - Land available in a single plot - High Land and ready to use - Land transfer under process

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PGCB Grid Substation Compound, Ishwardi, Pabna


Land available : Spot 1- Near Grid Control Room: 3 acres Spot 2- North side of Rest House: 3 acres Spot 3- Play ground & adjacent area: 7 acres Spot 4- About 5 acres Total area available: 18 Acres (Approx.)
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PGCB Grid Substation Compound, Ishwardi, Pabna Contd.

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PGCB Grid Substation Compound, Ishwardi, Pabna Contd.

Spot: 1

Spot: 2

Spot: 3

Spot: 4
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Rajshahi Char area in the river Padma


Prospective Locations: Char Mazerdiar: 200 acres (50-60MW) Char Ashariadah: 300 acres (80-100MW) - Sub-station and Transmission System is to be developed - River crossing Power evacuation system is necessary
Char is a Strip of Sandy Land rising out of a river bed.

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Chak Asharia

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Char Mazerdiar

Chak Asharia

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Adjacent area near Bangabandhu Bridge, Sirajgonj


Land available for Solar PV System :

East Side of Banghabondhu Bridge (Towards North) : about 30 acres - Prospective location for 10 MW East side of Banghabondhu Bridge (Towards South) : about 10 acres - Prospective location for 3MW West Side of Banghabondhu Bridge (Towards North) besides Ecopark : about 50 acres - Prospective location for 15 MW Sirajgonj embankment adjacent area (paikpara) : about 20 acres - Prospective location for 7MW Area adjacent to NWZPGCL Grid sub-station: 25-30 acres Prospective location for 10 MW Total area available: 150 Acres (Approx.)
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Adjacent area near Bangabandhu Bridge, Sirajgonj

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West Side

East Side

Paikpara

Near NWPGCL
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Expected Intervention from ADB and other Development Partners


TechnicalSupport Support Technical

Technical Assistance : Comprehensive Feasibility Study Project Design Preparation of Standard Procurement Documents Capacity Building
FinancialSupport Support Financial

Low Interest Credit Support Partial Risk Guarantee Partial Credit Guarantee
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Thank you

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