The Financial Express

Fund crisis thwarts growth of solar irrigation pumps

IDCOL looking for grants from donors, govt

| Updated: October 29, 2020 10:51:27

Lankabangla and Fianancial Express Lankabangla and Fianancial Express
File photo. (Collected) File photo. (Collected)

Installation of solar irrigation pumps is facing severe obstruction due to non-availability of grant fund, officials have sad.

The Infrastructure Development Company Limited (IDCOL) did not approve any new applications for setting up of the pumps since early this year due to non-availability of grant fund, they added.

The state-owned company provides 50 per cent of the total cost as grants, 35 per cent as loans and the rest 15 per cent comes as the equity.

Until October last year, the IDCOL approved 1,630 pumps, of which 1,323 are in operation with a cumulative generating capacity of about 32 megawatts of power (MWp). The IDCOL has set a target of installing 50,000 solar irrigation pumps by 2025.

The IDCOL gets fund from organisations like German development bank KfW, USAID, UK Aid, and some global trust funds to utilise as grant for setting up of solar irrigation pumps.

However, various other organisations like Bangladesh Rural Electrification Board (BREB) are also funding such projects.

The BREB got funding from the Asian Development Bank (ADB) and recently awarded contracts to a Bangladesh-German joint venture to install 705 solar-powered irrigation pumps in Bogra district.

Until now, some 1,950 solar pumps were installed with a total power generation capacity of around 47 MW.

There are some 1.34 million diesel-run irrigation pumps which consume nearly US$1.0 billion worth of fuel oil annually. Also, some 365,000 electricity-run pumps are there which require nearly 2,000 MW of power during summer.

The government has a plan to replace these irrigation pumps with solar-powered ones to reduce dependence on costly imported fuel oil.

IDCOL's head of renewable energy Enamul Karim Pavel told the FE that talks are underway with possible donors and the funds are expected to be available by March next.

"We are expecting big funding to finance several thousands of pumps," he said.

He said IDCOL is also discussing with the government to get financial support for the irrigation programme.

"Our plan is to reach 10,000 large-scale solar irrigation pumps by 2027 from current 1,500 which will replace about 100,000 diesel-run pumps," added Mr Pavel.

Chairman of Sustainable and Renewable Energy Development Authority (SREDA) Mohammad Alauddin told the FE that installation of solar-run pumps is still dependent on the donors' fund and its non-availability at this moment has slowed down the progress.

The government is working on developing a good business model for solar-run irrigation pumps to make it more feasible, he added.

President of the Bangladesh Solar and Renewable Energy Association Dipal C Baura told the FE that only the easy availability of low-cost loans can help expedite the conversion of the irrigation pumps.

Presently, he said, the IDCOL alone has a soft loan programme for solar irrigation pumps which is not enough for making quick progress in this regard. "Engaging more such organisations in the process may help," he said.

He said the IDCOL prefers to finance large-sized pumps which the small entrepreneurs cannot afford.

"Soft loans should be provided for setting up of small-sized pumps," he said, adding the banks having green financing window can come forward with soft loans to expedite the conversion of irrigation pumps.

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