PHOTON International The Photovoltaic Magazine

World Bank project could mean 64,000 SHS for Bangladesh

A World Bank project could lead to an eight-fold increase in the number of solar home systems (SHS) in Bangladesh. At the beginning of April, the Asian nation applied for a credit of $191 million from the International Development Association (IDA) as part of a World Bank program called the Rural Electrification and Renewable Energy Development Project (RERED).

RERED is intended mainly for expansion of the grid, but is also available for stand-alone solutions in grid-remote and sparsely populated areas. The program would include a renewable energy component of about $31 million for 64,000 SHS over five years. The World Bank is slated to make a final decision on program funding in June.

If approved, the credit would provide $20 million to the Infrastructure Development Company (IDCOL), enough for the sale of about 50,000 SHS -- with a $400 subsidy per system -- through selected partners and a micro-financing scheme. M. Fouzul Kabir Khan, IDCOL CEO, says there would be no bids. Instead, the components would be procured by IDCOL partners, including Grameen Shakti, a non-profit rural power company. Another $5 million would be used to cover technical assistance for the promotion of SHS.

In addition, the government's Renewable Electrification Board (REB) would receive $5.6 million to purchase 14,000 SHS, which it would distribute to customers on a fee-for-service basis. Khan says bids for these systems would most likely be tendered in the summer.

Khan, who says funding will include a grant from the Global Environment Facility (GEF) and government support, expects installation of the SHS would start in October. "This is a quantum leap for renewable energy in Bangladesh," he believes.

Bangladesh, which according to the World Bank has eliminated import duties on solar components, currently has about 8,000 SHS, mostly installed by Grameen Shakti, says Khan. According to a 1998 study by a Bangladeshi NGO, Prokaushali Sangsad Ltd., the country has a potential SHS market of 4 million households.