Bangladesh moves to cut tariffs for long-delayed solar projects
Bangladesh moves to cut tariffs for long-delayed solar projects
Bangladesh is renegotiating PPAs with solar developers that signed high tariffs years ago but never built their plants, prompting investor warnings about contract risk.
A government committee formed in April has already held talks with several project owners and is scheduled to meet two more on Oct. 27 and Oct. 29, with the aim of lowering tariffs agreed when project and equipment costs were higher.
Most projects were approved under the 2010 Quick Enhancement Act, largely on unsolicited proposals, and have not been completed despite repeated deadline extensions. Officials say tariffs should be aligned with current market levels because construction and solar equipment costs have fallen significantly.
Tariffs underpin project financial models, debt sizing, lender due diligence and equity decisions. If signed PPAs can be reopened, investors say it adds contractual and regulatory risk to Bangladesh’s power market.
Long-delayed or non-performing projects should be addressed through existing contractual milestones and remedies rather than blanket tariff cuts. Renegotiating tariffs for projects already at an advanced construction stage is seen as unacceptable.
The government wants to lower long-term power costs and clear stalled projects, while investors warn that reopening signed PPAs could weaken confidence in Bangladesh’s renewable energy investment environment.（From pv magazine）
