A Comprehensive Guide to Developing Solar Power Projects in Bangladesh

1) Navigating the Regulatory Maze: Essential Licences and Approvals

Successfully launching a solar project requires securing a series of approvals from different government bodies. The process can be broken down into distinct stages, from corporate setup to grid connection and environmental clearance.

Corporate Entry & Investment Foundation

• Company Incorporation (SPV) – RJSC; Trade Licence (City Corp/Pourashava); TIN & VAT registration (NBR): The standard approach for any significant energy project is to establish a Special Purpose Vehicle (SPV). This locally incorporated company ring-fences liabilities and streamlines project-specific accounting. The process involves registration with the Registrar of Joint Stock Companies and Firms (RJSC), obtaining a Trade Licence from the local government authority (City Corporation or Pourashava), and securing a Taxpayer Identification Number (TIN) and a Value Added Tax (VAT) registration from the National Board of Revenue (NBR), which are mandatory for all commercial operations.
• Foreign Investment Registration + One-Stop-Service (OSS) Onboarding – BIDA: For international investors, the Bangladesh Investment Development Authority (BIDA) is the primary government interface. All foreign direct investment must be registered with BIDA to ensure the legal right to repatriate profits and capital. BIDA's OSS platform is designed to simplify this process by consolidating numerous services, allowing investors to apply for essentials like work permits for expatriate staff, utility NOCs, and other permissions through a single digital window, significantly reducing bureaucratic hurdles.

Power-Sector Core Approvals

• Generation Licence / Licence-Waiver – BERC: The Bangladesh Energy Regulatory Commission (BERC), operating under the Electricity Act 2018 & BERC Act 2003 framework, governs power generation licensing. The path depends on project capacity: Solar PV ≤5 MW typically proceeds on a License Waiver Certificate, which is a lighter regime, while projects >5 MW require a full Generation Licence, involving a more rigorous application and vetting process. Forms and checklists are available on BERC’s website.
• Power Purchase Agreement (PPA) / Implementation Agreement (IA): The commercial heart of any utility-scale project is the offtake agreement. This is usually a long-term (20-year norm) PPA with the Bangladesh Power Development Board (BPDB) for utility-scale IPPs, or with the relevant distribution utility. BPDB routinely tenders for utility PV and signs PPAs. The IA, signed with the government, provides sovereign guarantees that backstop the PPA, making the project bankable.
• Grid Interconnection Study & Agreement: A project must secure a connection to the grid, following the BERC Electricity Grid Code Regulations, 2023. For transmission-level connection, the counterparty is the Power Grid Company of Bangladesh (PGCB); for distribution-level, it is the relevant utility (BREB/DPDC/DESCO/NESCO/WZPDCL). This requires a detailed grid impact study and formal agreement.

Environmental & Land Clearances

• Site Clearance then Environmental Clearance Certificate (ECC) – DoE: This is a non-negotiable, multi-stage process governed by the Department of Environment (DoE) under the Environmental Conservation Act and ECR (1997, amended to Feb 2023). Utility-scale power plants are treated as high-impact "Red Category" projects, requiring an Initial Environmental Examination (IEE) for Site Clearance, followed by a full Environmental Impact Assessment (EIA) with an Environmental Management Plan (EMP) before the final ECC is issued.
• Land Due Diligence & Conversion: This involves a thorough title search, mutation, and obtaining non-agricultural use permission as needed. Where applicable, land acquisition or lease falls under the ARIPA 2017 framework. Additional clearances are required for khas/char/forest/wetland land.

Importation, Fiscal, Banking & FX

• Import Registration Certificate (IRC) – CCI&E: This is required from the Chief Controller of Imports & Exports for bringing in modules, inverters, and other Balance of System (BoS) components.
• Customs/VAT Relief Planning: Duty and VAT schedules change frequently. For example, the inverter duty was cut to 1% in 2025. It is crucial to verify HS-line specifics at the time of import to plan for fiscal relief.
• Banking & FX: Dividend and profit repatriation, as well as capital exit, are processed via Authorized Dealer (AD) banks under Bangladesh Bank's GFET. This is a documentation-based process that generally does not require prior approval once tax and reporting obligations are in order.

Optional Path: Rooftop/C&I

For projects focused on the rooftop or Commercial & Industrial (C&I) market, developers can pursue Net Metering registration with the distribution utility under the Net Metering Guidelines 2018. This path has a capacity capped at 70% of the sanctioned load, with a 3 MW project cap specified in the 2018 guideline.

2) Sizing Your Investment: Project Requirements, Limits, and Market Outlook

The scale of your project dictates the regulatory path, technical requirements, and market strategy.

Regulatory Thresholds & Grid Interconnection

• ≤5 MW: Allows access to the streamlined BERC license-waiver route, a lighter approval regime.
• >5 MW: Mandates a full BERC Generation Licence, PPA/IA negotiation, and more stringent grid interconnection approvals.
• Grid & Interconnection: All projects must ensure technical compliance as per the Grid Code 2023 (fault-ride-through, protection, metering, forecasting obligations, etc.). The interconnection point (33/132/230 kV) dictates whether the counterparty is a distribution utility or PGCB.

Land Footprint & Solar Resource

• Land Footprint: Recent Bangladesh utility PVs show a practical requirement of ~4 acres/MW (e.g., Spectra 35 MW on ~140 acres). It is wise to allow for more land if topography, buffers, or waterlogging mitigation apply.
• Resource & Prospects: Bangladesh possesses a moderate-to-good solar resource, with GHI levels around ~4.3–4.9 kWh/m²/day (World Bank Global Solar Atlas). Installed renewable capacity continues to climb; official SREDA dashboards show ~1.6 GW RE (Aug 2025) with ~1.32 GW solar. Policy momentum includes new rooftop mandates on public buildings (June 2025).

What this really means: An investment of around 5 million USD places a project in the small utility or large C&I band, depending on EPC pricing and BoS scope. If you target >5 MW, assume the full BERC licensing + BPDB route; ≤5 MW can move via licence-waiver and private offtake/rooftop where viable.

3) Key Applicable Laws, Regulations & Instruments

A solid understanding of the governing legal instruments is essential. Here is a consolidated list.

• Sectoral: Electricity Act, 2018; BERC Act, 2003; BERC Licence Regulations, 2006 (as amended); BERC Electricity Grid Code Regulations, 2023; Renewable Energy Policy 2008 & Draft National Solar Energy Roadmap 2021–2041 (SREDA/ESMAP); Net Metering Guideline 2018.
• Environment & Land: Environmental Conservation Rules (ECR) 1997 (as amended to Feb 2023) for project categorisation and ECC; ARIPA 2017 for the land acquisition/requisition framework.
• Investment, Tax, Customs, FX: BIDA Act/One-Stop-Service practice; Import Policy Order & IRC regime; Customs Tariff & SROs; Bangladesh Bank GFET (2018) for repatriation.
• Procurement / Offtake: BPDB tendering for grid-tied PV; PPA/IA precedents for utility-scale projects.

4) Navigating On-the-Ground Realities: Key Challenges

While the policy framework is supportive, developers must be prepared for several practical challenges, with references to the governing bodies.

• Land Assembly & Use-Conflicts: Arable land scarcity drives costs and social scrutiny. Even flagship plants have needed 130–700 acres; early engagement and a robust ESIA are essential.
• Grid Evacuation & Curtailment Risk: Interconnection timing and system reserve margins are live issues; transmission readiness lags in some corridors, affecting COD and curtailment.
• Counterparty & Payment Risk: Sector overcapacity and subsidy burdens weigh on BPDB; bankability requires careful PPA protections (escrow/GoB support, change-in-law, deemed energy).
• FX & Repatriation Mechanics: Repatriation is allowed but documentation-heavy; plan early with AD banks under BB rules (dividends from retained earnings, tax clearance, post-facto reporting).
• Customs & Taxation Fluidity: Schedules/SROs do shift (e.g., inverter duty cut to 1% in 2025); align HS codes and exemption routes pre-shipment.
• Policy Execution Gaps: Tenders/PPAs can bunch or slip; policy targets often exceed on-ground delivery. Aligning your pipeline to current government priorities (e.g., the public-rooftop push) can help de-risk.