The Financial Express

Solar projects face execution hurdles

| Updated: August 07, 2021 12:00:09

Picture used for representation — Collected Picture used for representation — Collected

The implementation of solar power projects is undergoing hurdles due to prolonged pandemic-induced disruptions.

This inordinate delay has thus forced stakeholders to seek the government's intervention for time extension.

According to stakeholders, virus-related disruptions at home and abroad have led to a hike in equipment prices by 30-40 per cent.

Other problems include enhanced carrying costs, shipment setbacks and restrictions on the movement of foreign experts.

Besides, suppliers are failing to make delivery of equipment in time due to disruptions to production while bouts of lockdown have blocked movement of local manpower, thus delaying project execution.

Against this backdrop, a group of leading local and foreign developers, engineering, procurement and construction (EPC) companies, and equipment suppliers in Bangladesh has recently sought power ministry's intervention seeking six months for execution.

In a letter to the Sustainable and Renewable Energy Development Authority (SREDA), they said they were facing trouble in meeting project execution deadlines of independent power producer (IPP), operating expenses (OPEX) and capital expenditure (CAPEX) of rooftop and floating solar projects.

For rooftop solar OPEX projects, they are getting notice from off-takers to complete the project as per the commercial operation date (COD) specified in the power purchase agreement.

"Due to the pandemic situation in Bangladesh and beyond, delays in procurement and shipment of materials are causing delayed project execution," reads the letter.

Ezaz Al Qudrat A Mazid, founder and CEO of Solar EPC Development Ltd, says target for project completion in line with the COD deadlines is nearly unachievable.

"We need time extension to execute our ongoing and pipeline projects."

"We're looking forward to necessary steps by SREDA on this ground and expect some guidelines and circulars from it to support solar project developer during this difficult time," adds Mr Mazid.

Sungrow Renewable Energy Bangladesh Ltd's country head Imran Chowdhury says coronavirus has cast an adverse impact on the renewable energy sector, especially on the implementation of utility-scale IPP projects.

"Project owner and EPC companies faced huge challenges in maintaining procurement, supply chain, logistics, construction and installation work smoothly, also causing financial losses for them," he noted.

To mitigate the losses, Mr Chowdhury suggests, power ministry's support is highly required for extension of COD timeline of IPP-based solar projects without claim of any liquidated damages.

Such support would really boost all foreign firms to invest more in Bangladesh's renewable energy industry, especially in the IPP segment, he added.

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