Bangladesh Module Manufacturers Need Stimulus to Maintain Operations: GlobalData

The Solar Module Manufacturers Association Bangladesh have requested for government support after operations took a hit due to the COVID-19 industrial lockdown; Somik Das of GlobalData has commented on the situation.

Following the news that the Solar Module Manufacturers Association Bangladesh (SMMAB) requested for government support after operations took a hit due to the 40-day COVID-19 industrial lockdown; Somik Das, Senior Power Analyst at GlobalData, a leading data and analytics company, has commented on the situation.

The module makers have demanded BDT 5 billion (USD 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 suggested the stimulus package to be spent as follows: BDT 1 billion for grants, BDT 2 billion for interest-free loans, and BDT 2 billion for rooftop installations on public office buildings program. 

The country has set a target to generate 10 percent of electricity from renewable energy by 2021. This means 2,000 MW power should come from renewable sources. The country has 100 MW 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, according to Das.

“The current pandemic had complicated the situation of domestic module manufacturers, who are already reeling with foreign competition. To achieve the target, the government needs to address issues raised by various industry stakeholders due to the COVID-19 outbreak. Local companies invested in solar module manufacturing as the government declared PV panels as Product of the Year 2020. The current 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,” he said.

Further adding that the government is already providing some assistance in the form of EUR 200 million (USD 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. However, the 3 percent margin (1 percent by the central bank and 2 percent by the authorised lender) covered by the lender and central agency in the present market scenario is not providing complete relief to the developers and manufacturers. Hence the demand for BDT 5 billion stimulus package had come up,” he said.