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The Islamic Development Bank (IsDB) has agreed to provide $167 million in loans - roughly Tk 20.10 billion - to develop a 220MW solar power plant in the Sonagazi area of Feni district, a facility with the highest solar capacity in the country to date.
The Power Division proposed the project with an estimated cost of Tk 21.35 billion, with the combined contribution of the government and Electricity Generation Company of Bangladesh Limited (EGCB) amounting to Tk 1.25 billion, according to Planning Commission sources.
"The planning adviser has approved the development project proposal (DPP) in principle, and IsDB earlier confirmed its financing for the project," said a senior Economic Relations Division (ERD) official.
The project aims to enhance the share of renewable energy in Bangladesh's energy mix to support the national goal of generating 10 per cent of electricity from renewable sources, reveals the DPP sent from the Power Division to the Planning Commission.
Additionally, the project seeks to reduce dependence on fossil fuels, lower carbon emissions, and contribute to economic development and improved living standards, it added.
The plant stands out as the most cost-effective one among similar solar projects in the country, said Power Division officials, adding that per megawatt installation cost is estimated at Tk 96.99 million.
In contrast, the previously completed and ongoing projects have significantly higher unit costs. For instance, per MW installation cost is estimated at Tk 116.77 million for the 75MW Sonagazi plant.
The amount is Tk 160.31 million for the 6.55MW Sirajganj plant and Tk 137.29 million for the 100MW Madarganj plant.
This lower cost per MW in the proposed project can be attributed to economies of scale, improved project planning, and more efficient use of resources, making it a more financially viable and sustainable investment in the renewable energy sector, an official said.
Sources said EGCB had earlier acquired 999.65 acres of land in the Purba Bardhali mouza of Chorchandia union under the upazila to develop a renewable energy-based plant.
On approximately 285 acres of this land, EGCB has already established the country's largest government-owned solar power facility - 75MW Sonagazi Solar Power Plant - with financial support from the World Bank.
The new project has proposed constructing the plant on the remaining 699.65 acres.
Sources said a 2018 feasibility study conducted by RE Force Management Services (India), EQMS Consulting (Bangladesh), and Suntrace (Germany) assessed the techno-economic viability of developing solar and wind power projects in Sonagazi.
It supported the implementation of the World Bank-financed 75MW Sonagazi Solar Power Plant. Additionally, a flood study was carried out by the Center for Environmental and Geographic Information Services (CEGIS) in August 2021.
A project-specific feasibility study by Infrastructure Investment Facilitation Company (IIFC) in January 2025 recommended setting up a 220MW (AC) solar PV plant at the site, said Power Division officials.
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