A Z M Anas

A local renewable energy start-up will establish the country's first solar panel plant to cater to Bangladesh's rapidly growing solar energy sector, officials involved in the process said Friday.

Solar IC Ltd, majority of which controlled by Bangladeshi diaspora, will pour more than US$ 20 million into the proposed facility, which will have a capacity to produce up to 10 megawatts (MW) of electricity.

"This is the cleanest option. We're ready to finance the new venture," Islam Sharif, chief executive officer of IDCOL (Infrastructure Development Company Limited), said.

IDCOL, the country's biggest state-owned clean energy financier, will provide soft loans for the proposed venture as it moves to give a big push to the solar energy sector.

The solar upstart said it is now exploring the joint-venture option, preferably with a United States company and is hopeful about launching operations in early 2011.

It also said that the company would initially assemble photo-voltaic panels and then gradually build manufacturing facilities over the next two years to cash in on the rapid growth in the solar power system in Bangladesh.

"The company's initial plan is to generate 5.0 megawatts of electricity. But that can reach up to 10 MW, given the potential success," according to the company proposal.

IDCOL officials said the plant would help drive down costs of panels for the renewable energy promoters who have been importing solar panels at subsidised prices from Japan and China.

Excluding solar panels, Bangladesh is self-reliant in all the accessories in solar housing systems including batteries and wires. Such panels convert sunlight into electricity.

The move to build the plant comes as solar power makes inroads even in remotest parts of the country where the national electricity grid is absent.

The IDCOL top executive said that policy change is required to encourage new companies to invest in clean energy projects.

"The new renewable energy act should be made more lucrative so that the private sector can come forward. Even developed nations like Germany and the US are paying five times for the renewable energy," he said.

"I think the government can provide the viability gap fund under the PPP (Public-Private Partnership)," he told the FE.

The number of solar powered households have reached around 300,000, almost doubled in 18 months, making it one of the fastest growing sectors in Bangladesh, according to the IDCOL figures.

Aided by soft-loan refinancing schemes by IDCOL, Grameen Shakti (GS) and other charities have lighted up homes and shops for around 2.0 million people.

Sharif said he is also in talks with a Spanish company, which is interested to set up such a plant.

The Spanish company is looking for a Bangladeshi partner, even though it would be a majority investor, said the IDCOL top boss, formerly of the Citigroup.