Solar Module Manufacturers Association Bangladesh (SMMAB) has requested for support from the government after operations took a hit due to the 40-day COVID-19 industrial lockdown.
Solar module makers have demanded BDT5 billion or $58.9 million to be spent on grants, long-term interest-free loans, tax waivers over the next five years and to implement government projects of a solar rooftop PV installation on public buildings.
SMMAB has suggested the stimulus package to be spent as follows: BDT1 billion for grants, BDT2 billion for interest-free loans, and BDT2bn for rooftop installations on public office buildings program.
Bangladesh had set a target to generate 10 percent of electricity from renewable energy by 2021. This means 2,000MW power should come from renewable sources. The country has 100MW of module manufacturing capability.
These manufacturers were already dealing with issues such as competition from foreign players, lack of local content obligations in support of domestic industry, and lack of supportive banking policy.
“The pandemic had complicated the situation of domestic module manufacturers, who are already reeling with foreign competition,” Somik Das, senior power analyst at GlobalData, said in a statement.
Local companies invested in solar module manufacturing as the government declared PV panels as Product of the Year 2020. The pandemic had put these investments from the local manufacturers at risk as they are dealing with supply chain bottlenecks and shutdown of manufacturing activity leading to huge financial losses.
Bangladesh government is providing some assistance in the form of $218.7 million Green Transformation Fund (GTF) to provide soft loans to solar developers, and other environment-friendly products and Eurozone’s energy efficiency components’ importers.
This move was targeted at addressing liquidity and supply chain issues. The 3 percent margin (1 percent by the central bank and 2 percent by the authorized lender) covered by the lender and central agency is not providing complete relief to the developers and manufacturers, says GlobalData.