Industrial Rooftop Solar: Prospects in Bangladesh

Overview of IDCOL A fully government owned financial institution

Started operation in 1997

Catalyzes private sector participation in infrastructure and renewable energy projects/programs

Market leader in renewable energy financing

Largest financier in private sector infrastructure projects in Bangladesh

Funded by the government and multiple development partners i.e. the World Bank, ADB, JICA, IDB, KfW, GIZ, USAID, UKAID etc.

Financed 2,200 MW Power Projects Financed 1st River port in private sector

Financed USD 147 million in Telecom Sector

Financed 1st Private Sector DrydockProject

Financed Refinery plant of PartexGroup

Financed 1st Central Effluent Treatment Plant

Infrastructure Projects Financed by IDCOL

Financed 4.13 Million SHS

Installed 49,000 Biogas Plants

27 Solar Mini grid Projects1,186 Solar Irrigation Pumps in operation

Installed 2 Rooftop Solar Projects with capacity of 1.82 MWp

Installed 1.65 million Improved Cook-stoves

Renewable Energy Initiatives

Why Rooftop Solar

Project Benefits

Financial Benefits

Environment friendly initiative

•Utilization of unused space

•Reduced use of grid electricity

•Minimum maintenance

•Easy to implement• Cheaper electricity than grid• Reduction in electricity bills• Sale of excess electricity to the national grid

• Reasonable payback period•Enhances green credentials

•Demonstrates environmental responsibility to stakeholders

Market ReadinessTechnical Standards

Pool of experts

Multiple project developers

Concessionary financing

Dedicated project unit

Net metering policy

IDCOL’s Investment Plan

Target to finance 300 MWp by 2022

Pipeline of 40 projects (30 MWp)

Secured soft financing from donors

Already approved 8 projects (4.50 MWp)

Approved loan of Tk. 28.38 crore

Approved Rooftop Solar Projects at a Glance

723.06 kWp project of Paragon Poultry Ltd.

1.1 MWp project of Far East Spinning

Industries Ltd.324 kWp project of

MegaRoofLtd.518 kWp project of Colour and Fashion

Ltd. (Textile)

322.5 kWp project of Egarosindur Cold Storage

Ltd.950.04 kWp project of

PUBL351 kWp project of Libas Textiles Ltd.

200 kWp project of Super Star Renewable

Energy Ltd.

Partnering with IDCOL

Technical supports

Long-term soft financing

Performance monitoring

Capacity development

supports

IDCOL’s Financing Scheme

• Term LoanFacility

• 80% of the project costLoan amount

• 10 yearsTenor

• 1 year (principal only)Grace period

• QuarterlyRepayment

• 6% p.a. (Fixed for Loan Tenor)Interest rate

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Project Due Diligence & Approval Stages

Pre-approval

Approval

Post-approval

Submission of proposal to

IDCOL

NameClearance

Physical Inspection by

IDCOL

Technical Design & Evaluation of

Quotations

Project Appraisal

Disbursement of loan& Project

Implementation(milestone based)

Agreement SigningEquity Injection &

Security Completion by Borrower

Project COD

CRMC Approval Credit Committee Approval Board Approval

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Required Documents• For Borrower:

• Constitutional documents copy (MoA, AoA, Certificate of Incorporation, Schedule X, Form XII, ETIN, VAT, Trade License etc.)

• Financial documents copy (Audited financials, Sanction letters, Bank statement, Credit rating report etc.)

• CIB documents• Shareholders documents copy (IT10B, ETIN, NID, Passport, Personal business profile

etc.)• Sister Concern:

• As mentioned above (if any)• Corporate Guarantor:

• As mentioned above (if any)• Technical Documents (Design, Equipment details, BoQ & BoM, Structural integrity analysis

etc.)• Others (standard formats as required by regulatory authorities)

Return on Industry Investment

Capacity 518 kWp

Capital investment Tk. 76.25/Wp

Loan amount 80% of project cost at 6% interest for 10 yrs

Assumptions:

Diesel genset use 2 hours

Grid tariff Tk. 8.56/kWh

Diesel rate Tk. 14/kWh

Operating expenses

Tk. 4,31,053 /year

Payback period 7.61 years

Equity IRR 17.61%

Electricity produced from solar/year 6,88,558 unit (kWh)

Cost of production Tk. 6.83/unit

Finding:

Diesel fuel Savings in a year (litre)

CO2 Emission Reduction in a year

(Tonnes)34,061 91.2

Project Performance: Paragon Poultry Ltd.

• Total generation from COD till date* : 747,138 kWh • Electricity cost savings total : BDT 63.95 lac

The generation dropped down in January 12, 2019 due to a fiber cut issue. Theissue was resolved from the following day.

*16 February, 2019

Project Performance: Far East Spinning Industries Ltd.

• Total generation from COD till date* : 420,282 kWh* • Electricity cost savings total : BDT 35.98 lac*

*16 February, 2019

Recommendation

• Technology should be selected considering weather conditions, electrical infrastructures, project site specific considerations.

• Study of building integrity should be conducted before technical design.

• Mounting options should be selected considering water leakage and roof life.

• Electrical safety equipment e.g. lightning arrester, string disconnects, etc. need to be installed in proper manner.

Thank You