Bangladesh’s Cancellation of Solar Projects Erodes Foreign Investor Confidence, Warns BSREA

The Bangladesh Solar and Renewable Energy Association (BSREA) has voiced strong concern over the interim government’s recent cancellation of 37 solar power projects, warning that the decision has seriously shaken foreign investor trust in the country’s renewable energy sector.

These projects, initially awarded Letters of Intent (LoIs) under special provisions in Bangladesh’s electricity and energy regulations, were revoked in recent months without clear justification.

Speaking at a press conference on Saturday, BSREA leaders called on authorities to reconsider and reinstate the cancelled projects, highlighting the broader negative implications for both current and future clean energy investments.

“Foreign investors are losing trust,” said BSREA President Md Mostafa Al Mahmud. “Roughly $300 million in previously committed investment has been jeopardized. This sends a troubling signal to the international community and must be re-evaluated.”

BSREA cited the lack of interest in 55 newly tendered solar projects as further evidence of investor retreat. Many tenders reportedly received only one or zero bids, underscoring investor uncertainty.

Key BSREA figures in attendance included General Secretary Engr Mohammad Ataur Rahman, Senior Vice President Zahidul Alam, Vice President MA Taher, Engr SK Mohammad Ruhul Amin, and Treasurer Nitai Pada Saha.

Despite recent setbacks, BSREA praised the release of the “Renewable Energy Policy 2025”, calling it a “historic milestone” that could support long-term transformation. The policy includes mandatory solar panel installation on all government buildings, which the association sees as a positive catalyst for sectoral growth.

BSREA also welcomed the reduction in import duty on inverters from 10% to 1%, but urged similar tax relief on other essential solar equipment such as mounting structures, DC cables, batteries, controllers, and solar pumps.

“To attract investment and scale solar deployment, an investor-friendly tax and tariff structure is vital,” the association said.

With domestic natural gas reserves dwindling, BSREA emphasized that Bangladesh’s growing dependence on imported energy makes the transition to renewable energy not just strategic—but essential.

The press conference also highlighted challenges facing net metering implementation. Grid connection approvals, according to BSREA, often face long bureaucratic delays, sometimes lasting several months. The group advocated for a streamlined, customer-centric approach.

Criticism was also directed at customs practices. BSREA noted that solar components are often taxed based on weight rather than proforma invoice (PI) value, leading to inflated assessments disconnected from market reality.

The association laid out several key demands to support investor confidence, including:

• Exempting 7.5% trade VAT on solar panels and accessories

• Tax cuts on lithium-ion batteries

• A clear roadmap for enforcing the High Court’s rooftop solar mandate

• Establishing a dedicated solar monitoring unit under the Ministry

• Enforcing stricter controls on low-quality solar product imports

  
  

BSREA concluded by reiterating its readiness to collaborate with the government in achieving the country’s 2040 renewable energy goals.

Meanwhile, the Centre for Policy Dialogue (CPD) has echoed BSREA’s concerns, urging the government to review the cancellations and focus on building a more predictable and investor-friendly renewable energy framework.