Bangladesh saved up to $1.85bn in 15 years from Solar Home System scheme


According to a recent report conducted by the World Bank titled “Living in the light: The Bangladesh solar home systems story”, Bangladesh’s net financial gain for adapting the solar home system (SHS) was $1.85 billion while providing clean energy for the past 15 years since 2003.

The report was released on a virtual platform on 8th April (Thursday).

This came about through scalable off-grid electrification business models combining private sector solar electrification initiatives and microfinancing.

The scheme was being implemented under the state-run Infrastructure Development Company Limited’s (IDCOL) Rural Electrification and Renewable Energy Development (RERED) Project.

The new benefit of Bangladesh’s rural households using SHS was $1.35 billion. Besides, Infrastructure Development Company Limited (IDCOL) achieved $54 million, its partner organisations (POs) achieved $103 million and the government earned revenue worth $200 million in taxes on SHS.

On the other hand, the kerosene oil distributors lost $47 million due to the installation of around 4.1 million SHSs in the remote villages of Bangladesh where grid electricity supply is absent, the report added.

The report inspected the SHS programme’s organizational effectiveness, how partners were mobilised, how quality was enforced, how risks were mitigated, and how financial resources were raised and deployed as Bangladesh scaled up renewable energy use.

It shared experiences and lessons that would be useful for other countries as they scale up solar off-grid electrification programmes.

The report said the SHS has brought significant changes in rural life as the off-grid electricity expanded the working hours of the remote populations.

It also read Bangladesh has the largest off-grid solar power programme in the world which offers experiences and lessons for other countries for expanding access to clean and affordable electricity.

The solar power programme has enabled 20 million Bangladeshis to get access to the electricity, it further added.

Starting in 2003 with a piloting to 50,000 households, the SHS programme reached its peak providing electricity to approximately 16 per cent of the total rural population.

In the meantime, the WB supported the state-run IDCOL for the programme through its “Successive financing through the Rural Electrification and Renewable Energy Development (RERED) Project”.

Besides, the global lender enlarged the support to scale up other clean renewable energy options including solar irrigation, solar mini-grids, rooftop solar, and solar farms and had so far provided $726 million to Bangladesh.

Between 2003 and 2018, the project reduced greenhouse gas (GHG) emissions by approximately 9.6 million tonnes of CO2 equivalent. The programme helped reduce indoor air pollution by avoiding the consumption of 4.4 billion litres of kerosene.

Mercy Tembon, World Bank Country Director for Bangladesh, said: “Bangladesh is known for its innovative development approaches. In remote and hard to reach areas, the government successfully introduced affordable off-grid renewable energy solutions through a public-private partnership. Clean electricity meant better health and living conditions for families and more study time for children.”

“Our partnership with the government for this programme spans nearly two decades, and now our support has expanded to include other renewable energy options,” she said.

“58 non-government organisations supplied and installed the solar home systems which made affordable micro loans,” said Amit Jain, senior energy specialist of the World Bank and a co-author of the report.

“We expect that about 17 per cent of Bangladesh’s electricity will come from renewable sources by 2041,” said Nasrul Hamid, state minister for power, energy and mineral resources, while attending as chief guest.  

Bangladesh has a host of incentives such as tax breaks on solar rooftop installations, he added.

In addition, the project would continue until the end of this year.




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