Interim govt finally cancels approval for 34 solar power plants

Approvals for 34 solar-power plants are finally rescinded following the repeal of a special-provision act by an ordinance promulgated by the post-uprising government, generating frustrations in the entrepreneurs.

Officials said Bangladesh Power Development Board (BPDB) cancelled the approvals on "clear instructions" from the Power Division.

The plant companies regret that the cancellation came while a good number of writ petitions pending with the upper court regarding the disputes.

The BPDB recently sent letters to the companies concerned who were once issued Letter of Intent (LoI) under the impugned Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 to set up the power plants.

The letters, carrying almost similar messages for the firms, mention that the Quick Enhancement of Electricity and Energy (Special Provisions) (Repeal) Ordinance 2024 was published in the Bangladesh Gazette on November 28, 2024. By virtue of this ordinance, the 2010 Act has been repealed.

"As your project was initiated under the provisions of the repealed Act, the Government of Bangladesh (GoB) has decided not to proceed with projects initiated under the said Act," it is stated in the letters signed by BPDB board secretary Rashedul Hoque Prodhan.

"Accordingly, and in compliance with the directive of the Government of Bangladesh (GoB), the Bangladesh Power Development Board (BPDB) hereby terminates the above-referenced Letter of Intent (LoI) with immediate effect," says the power board.

These 34 solar-power plants, once implemented, were supposed to generate 5,681 megawatts of electricity.

Earlier in August last year, the Power Division issued an office order citing that all kinds of ongoing negotiations, project selection/processing, and the processing of procurement under the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 (amended 2021) will remain suspended.

The order, however, also mentioned that the activities will continue in case of deals already signed under the act.

Sources said later in November last year, the Power Division in a letter to the BPDB informed that the government would no more build any power plant or process any power-purchase agreement under the special-provision act.

Also, the Power Division letter informed that the High Court cancelled the section 6 (2) and section 9 following a writ petition. Therefore, the procedures in case of the 34 solar power plants for which the LoI issued, but no Implementation Agreement (IA), Power Purchase Agreement (PPA), and Land Lease Agreement (LLA) have been signed, has to be completed through open tender instead of the special provision.

Following the Power Division's directive, the BPDB on November 18 last year issued letters to the 34 plants informing them about the government decision.

Later in late July, the Power Division informed the BPDB that the gazette notification of the ordinance repealing the special provision act was published.

In line with the section 2 (GA) of the ordinance, the government preserves rights to review any activities taken under the special-provision act.

Sources have said the BPDB in a board meeting earlier last month discussed that since the government preserves rights to review any activities taken under the special provision act, the board needs "clear directives" from the government before finally scrapping the LoIs of the 34 plants.

Later in mid-August, the BPDB in a letter to the Power Division sought directives before scrapping the LoIs. Two weeks later, the Power Division gave order for cancellation of the LoIs.

Following the decision of scrapping the LoIs, a number of entrepreneurs filed writ petitions with the High Court.

The High Court, after hearing the petitions, issued rules asking the respondents to show cause as to why the ordinance 'shall not be declared to have been promulgated ultra-virus to the constitution and as to why the letter issued by the BPDB on November 11, 2024 shall not be declared to have been done without lawful authority and with no legal effect'.

Also, the High Court asked why the BPDB shall not be directed to sign PPA and IA with the petitioner.

However, the government has yet to give reply to the court rules.

BSREA president Mostafa Al Mahmud told the FE that the government had cancelled the LoIs without taking into consideration the plights of the businesses who have already invested some $300 million for the projects.

"Foreign companies in particular will remain away from making investment in Bangladesh's power sector due to the absence of policy sustainability," he said.

Contacted, BPDB chairman Rezaul Karim late August told the FE that the government would face the writ petitions filed by the entrepreneurs accordingly.

"There were 'massive anomalies' in case of project approvals and fixation of power tariffs; which is why the government decided to cancel these projects," he said.

syful-islam@outlook.com