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The Financial Express

Solar home system scheme benefits Bangladesh $1.7b


Solar home system scheme benefits Bangladesh $1.7b

Bangladesh's net benefit for using the solar home system (SHS) was estimated at US$1.7 billion at constant 2018 US dollar price, said a World Bank (WB) report.

It said the net financial gain of Bangladesh's rural households using SHS was $1.35 billion while Infrastructure Development Company Limited (IDCOL) gained $54 million, its partner organisations (POs) gained $103 million and the government earned US$ 200 million in taxes on SHS.

However, the kerosene oil distributors lost $47 million due to the installation of around 4.1 million SHSs in the remote villages of Bangladesh where grid electricity supply is absent, the report added.

The report titled "Living in the light: The Bangladesh solar home systems story" was released a virtual discussion on Thursday.

The SHS has brought significant changes in the rural life as the off-grid electricity expanded the working hours of the remote populations, said the report.

It said Bangladesh has the largest off-grid solar power programme in the world which offers experiences and lessons for other countries for expanding access to clean and affordable electricity.

The solar power programme has enabled 20 million Bangladeshis to get access to the electricity, it said.

Starting in 2003 with a piloting to 50,000 households, the SHS programme reached its peak providing electricity to approximately 16 per cent of the total rural population, the WB report said.

Meanwhile, the WB supported the sate-run IDCOL for the programme through its "Successive financing through the Rural Electrification and Renewable Energy Development (RERED) Project".

The WB extended the support to scale up other clean renewable energy options including solar irrigation, solar mini-grids, rooftop solar, and solar farms and had so far provided $726 million to Bangladesh.

Between 2003 and 2018, the project reduced greenhouse gas (GHG) emissions by approximately 9.6 million tonnes of CO2 equivalent. The programme helped reduce indoor air pollution by avoiding the consumption of 4.4 billion litres of kerosene.

Attending as the chief guest, State Minister for the Power, Energy and Mineral Resources Nasrul Hamid said: "Our government is committed to driving up renewable energy and has a host of incentives such as tax breaks on offer to drive net-metered solar rooftop installation."

Mercy Tembon, World Bank Country Director for Bangladesh, said: "Bangladesh is known for its innovative development approaches. In remote and hard to reach areas, the government successfully introduced affordable off-grid renewable energy solutions through a public-private partnership. Clean electricity meant better health and living conditions for families and more study time for children."

"Our partnership with the government for this programme spans nearly two decades, and now our support has expanded to include other renewable energy options," she said.

Amit Jain, Senior Energy Specialist, World Bank and a co-author of the report, said: "58 non-government organisations supplied and installed the solar home systems made affordable with micro-loans."

"The SHS Programme demonstrated that millions of dollars mobilised at the international level can flow efficiently to the remotest corners of the country to offer loans in amounts as low as one hundred dollars, which enables a rural household to purchase a solar home system."

The report analysed the SHS programme's organizational effectiveness, how partners were mobilised, how quality was enforced, how risks were mitigated, and how financial resources were raised and deployed as Bangladesh scaled up renewable energy use.

It shared experiences and lessons that would be useful for other countries as they scale up solar off-grid electrification programmes.

Chairman of Sustainable and Renewable Energy Development Authority (SREDA) Chairman Mohammad Alauddin, IDCOL Executive Director Mahmood Malik, IDCOL Deputy CEO and CFO Monirul Islam, International Renewable Energy Agency (IRENA) Deputy Director General Gauri Singh, WB's Practice Manager for South Asia Simon Stolp, Visiting Professor of the Sloan School of Management, MIT, Dr Jose Ignacio Perez-Arriaga, and WB Regional Director Guangzhe Chen also spoke at the programme.

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