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16 firms get nod

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16 firms get nod

Sohel Parvez

The government has given the approval to 16 firms to bring vessels to catch tuna and pelagic fishes beyond the 200-metre depth of the Bay of Bengal and in the international waters, said officials of the Ministry of Fisheries and Livestock.

Of the 16, nine got the permission to catch tuna and seven for seine fishing to catch pelagic fishes beyond the 200-metre depth, said a senior official of the ministry.

Seine fishing is a method of fishing that employs a fishing net called seine that hangs vertically in the water with its bottom edge held down by weights and its top edge buoyed by floats.

Nou Kollan Foundation Trading Company and Nou Kollan Shipping Lines, welfare enterprises of Bangladesh Navy, got permission to operate two long liners and two purse seiners to catch fish in the deep sea.

Some firms are connected to people of the ruling party Awami League, said insiders.

Ministry officials said businesses that got clearance are required to submit specification of vessels and project profile to the Department of Fisheries (DoF) within six months to bring the ships for licences.

Until now, five have submitted their specification.

“We expect that the rest of the firms will also submit their papers,” said Md Towfiqul Arif, joint secretary (blue economy) of the fisheries ministry.

Mahbubur Rahman, chief executive of Al Rafi Travel Trade, said his firm along with three others that got approval to bring purse seiner vessels to catch pelagic fishes in the deep water had submitted documents last week.

The rest of the firms are yet to submit the required documents to the ministry, although three months have passed since the permissions were granted.

Fishing in deep sea is a new area for business.

“There are prospects. We are considering going for a joint venture,” Rahman said, while declining to give further details.

Industry insiders said Bangladesh is yet to introduce long line fishing, a commercial fishing technique to catch tuna and other fish species in the deep water.

So, some local investors remain shy about proceeding fast as they do not have any idea of the stock of tuna in the deep part of the Bay and prospects of returns on investment.

“We are actually exploring. We are doing our due diligence,” said Sameer Sekandar, proprietor of Diamond Fisheries, one of the nine firms that were awarded approval for long liners.

He said those who have got permission for long liners are related to the fishing industry.

“So, we are taking time. We really want to do something great,” Sekandar said.

There is perception among some that high investment would be required. But $2-$4 million may be needed to buy a long liner, he said, adding that he will submit specification and other documents within the next 30 days.

AK Sarkar, executive director of Karnaphuli Ltd, said they are trying to form a consortium with other companies that have got permission to bring long liners for tuna fishing. AL lawmaker Saber Hossain Chowdhury is the managing director of Karnaphuli Group.

The government took the step to explore sea resources as Bangladesh got the right to fish in 118,813 square kilometres area of the sea and trawl up to 200 nautical miles into the Bay of Bengal after a verdict from an international tribunal in 2014.

The country has also become a member of the Indian Ocean Tuna Commission to explore tuna at the outward boundary of its 200 nautical miles. In 2016, the fisheries ministry gave consent to four firms to do long line fishing but cancelled three of the permits in April this year for their failure to submit specification and other papers.

As per provision, the firms have to submit specifications, proforma invoice and project profile within six months of getting approval and import or build the vessels within two years of approval.

Marine catches accounted for 15 percent of total fish production at 41.34 lakh tonnes in fiscal 2016-17. Of the total marine catch, industrial trawling was 2.62 percent, according to the DoF.

 

Bangladesh has stable economic outlook

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Bangladesh has stable economic outlook

Three rating agencies arrive at same verdict

Star Business Report

Bangladesh has held on to its stable credit profile from three global rating agencies, in what can be viewed as an endorsement of the way the central bank and the government are steering the economy.

For the ninth year in a row Moody’s and Standard & Poor’s gave Bangladesh ‘Ba3’ and ‘BB-‘ ratings respectively. Fitch gave a ‘BB-‘ for the fifth time.

The Bangladesh Bank published the country’s latest sovereign credit ratings from the three agencies on its website on Sunday.

However, the agencies have identified the banking sector, especially the state-owned banks, and the prospect of political uncertainty surrounding the upcoming general election as major risks.

“The stable outlook reflects our expectation that Bangladesh’s consistent economic growth trajectory and strong donor support will continue to raise average income and broadly sustain the country’s external profile over the next 12 months,” S&P said in its report.

The rating agency may raise the ratings if measures targeted at growing the revenue base and boosting collection efficiency materially improve Bangladesh’s fiscal performance.

It may also upgrade Bangladesh if the government significantly reduces energy, infrastructure and administrative bottlenecks, resulting in higher investment and eventually a sustained increase in trend growth for real per capita GDP.

Conversely, S&P may downgrade Bangladesh if fiscal slippages result in rising public debt and external donor support declines materially.

Low economic development, as represented by per capita GDP of $1,620 for 2018, is one of Bangladesh’s main rating constraints. This income level offers a weak and narrow revenue base, in turn limiting the fiscal and monetary flexibility needed to respond to exogenous shocks.

“Nevertheless, Bangladesh’s real per capita GDP growth of about 5.4 percent over the 2012-2021 period indicates consistently strong real GDP growth despite numerous structural impediments, in particular the shortage of power,” it added.

Moody’s echoed the same concerns about the narrow government revenue base.

“We expect Bangladesh’s government revenue to GDP ratio to remain among the lowest within our rated universe, given the delay in the implementation of the VAT law.”

Moody’s assessed Bangladesh’s economic strength as “Moderate (+)”, which is similar to Sri Lanka and Costa Rica.

It also assessed that Bangladesh’s banking sector risk as “Moderate (-)”, which indicated that the country’s banking sector is not performing well enough.

The country’s state-owned commercial banks account for 30 percent of banking system assets and exhibit significantly weaker asset quality, profitability, and capital adequacy than private commercial banks.

Gross non-performing loans of state-owned banks amounted to 29.3 percent of total loans in the third quarter of 2017, compared to 6 percent for private commercial banks, and have been rising since 2015, said the Moody’s.

“The banking sector’s health and governance standards are generally weak, particularly in public sector banks,” Fitch said in its report.

It also said Bangladesh exhibits one of the highest real GDP growth rates in the sovereign space.

However, the economy is less developed on a number of metrics than many of its peers.

The average per capita GDP remains low compared with the ‘BB’ range median of $5,611, although major improvements have taken place over the past decade on a number of social metrics.

Political and safety risks remain substantial, Fitch said.

“Continued strong political polarisation could again lead to widespread violence and blockades, especially nearer to the general elections.”

 

Prefabricated steel to herald a new era

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Prefabricated steel to herald a new era

Expert says at International Seminer

 

Star Business Report

 Innovative use of prefabricated steel may help start a new era in Bangladesh’s infrastructure sector, experts said yesterday.

Local technology and product of prefabricated steel can bring a significant change in the shape of structures in the country, said Ahsanul Kabir, head of the civil engineering department of Bangladesh University of Engineering Technology.

He spoke while delivering a keynote speech at an international seminar on “Construction and innovation 2018” at the Westin Dhaka.

The event was jointly organised by Meinhardt (Thailand) Ltd, Nippon Steel & Sumitomo Metal Corporation of Japan and McDonald Steel Building Products Ltd of Bangladesh.

It would need 25 percent less time if steel is used in place of concrete to build any structure, said Kabir.

However, there is a huge challenge for the buildings made of prefabricated steel, as possibilities are there for the steel structure to melt down and collapse in case of fire incident, he said.

Steel structure allows the project architects to clearly highlight what they want to express and show creativity, Rakesh Rahmatullah, senior design engineer of McDonald Steel Building Products Ltd, said in his presentation.

Rahmatullah said his company is renovating old steel infrastructure, including age-old railway bridges, keeping the original structure intact with local products and technology.

Besides, McDonald Steel Building is also constructing hundreds of infrastructure across the country using steel structure.

Steel structure along with modern technology helps the architects cut the time needed for designing and drawing of any infrastructure, clear representation of customers’ requirements and faster completion of a construction work, he said.

Masanobu Okamoto, a representative of Nippon Steel and Sumitomo Metal Corporation, said their steel sheets are used in many fields, like port and harbour structures, river revetments, retaining walls and cofferdams etc and have acquired high market acceptance globally.

He said Bangladesh has good potential in this sector.

Harold Huang, country representative of Beijing Urban Construction Group Bangladesh, said they have constructed many eye-catching projects across the world using steel structure.

Some of them are: the Bird’s Nest, the national stadium of 2008 Beijing Summer Olympic, and Ice Ribbon, the national speed skating oval of 2022 Beijing winter Olympics, he said.

Singapore Changi Airport and Marina Bay Sands are some of the big projects of Huang’s company that were constructed using steel structures with the cooperation of Yongnam Engineering & Construction Pte Ltd, Singapore, he said.

The event was moderated by Mushtaque Habib, project director at North South University.

The programme was also addressed by John Pollard, regional CEO and managing director of Meinhardt Thailand, and Matthew Silvester and Praween Chuslip, associate directors of the company.

Adopt efficient management practices in apparel: PwC

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Adopt efficient management practices in apparel: PwC

Star Business Report

 

The apparel industry in Bangladesh needs to adopt efficient management practices to improve productivity and efficiency to increase its global competitiveness, experts said at a programme yesterday.

“The ecosystem needs to undergo a transformation today,” Mamun Rashid, managing partner of PwC Bangladesh, said at the PwC Summit held in Chittagong.

“Issues around processes, technology and people need to be addressed together to accelerate growth in the sector,” he said at the event on “Driving transformation in Bangladesh’s apparel industry”.

“We must adopt global best practices, look out for market shifts and align ourselves to global trends.”

“Bangladesh’s garment industry is a key contributor to the country’s growth story. The declining export growth rate has been an area of concern for the industry and policymakers,” Rashid said in a press release.

Exports fetched $36.66 billion last fiscal year, but fell short of the government’s target of $37.5 billion.

Bangladesh’s main export earner, apparel shipments brought home $30.61 billion, up 8.76 percent year-on-year in 2017-18, according to data from the Export Promotion Bureau.

The garment sector accounts for 12 percent of the country’s GDP and 83 percent of its exports. The industry has huge growth potential thanks to the growing demand from international markets, experts said at the summit.

Manufacturers are embracing newer machinery and production technologies to stay relevant. These along with a skills upgrade of workers have led to a shift towards manufacturing of specialised garments in Bangladesh, they said.

However, a lot remains to be done to outperform global majors in the retail manufacturing space. The export growth rates are fluctuating and have shown a declining trend over the past few years.

Productivity in Bangladesh remains low as compared to other garment manufacturing nations like China and Vietnam, they said. There is an urgent need to revamp infrastructure too to aid the potential growth of the sector, according to the experts.

The growth in the sector needs to be sustainable and environment-friendly, said Pallab De, partner for management consulting of PwC India.

The industry has seen a significant rise in the number of Leadership in Energy and Environmental Design (LEED)-certified environment-friendly factories and this is exemplary in the global manufacturing industry, according to Pallab De.

“The country today boasts of the top three eco-friendly garment factories in the world. The government’s decision to subsidise interest rates to companies intending to set up green factories will provide the much needed boost.”

There is a significant scope to increase operational efficiency in the sector and help meet international standards, the analysts said. The seminar highlighted the upcoming trends in the garment sector.

The better businesses understand the landscape, the more they would be able to capitalise on the growth opportunities in the sector, said Hossain Zillur Rahman, chairman of the Power and Participation Research Centre.

He shed light on the importance of Chittagong as a business hub and requested the government and entrepreneurs to work together in order to expand the garment industry in the port city.

“The government should also undertake some initiatives to provide improved technical education to the workers that could lead to a skilled workforce.”

More than 50 industry stalwarts and representatives from trade bodies attended the summit.

Md Fazlul Hoque, a former president of Bangladesh Knitwear Manufacturers and Exporters Association, and SM Tanvir, a director of Bangladesh Garment Manufacturers and Exporters Association, also spoke.

UK wants to invest in infrastructure

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UK wants to invest in infrastructure

Says British PM’s Trade Envoy to Bangladesh Rushanara Ali

 

Unb, Dhaka

 

The United Kingdom wants to invest in a big way in Bangladesh to help achieve its middle-income country status saying the next generation of British Bangladeshis can make the difference with their cemented ties with Bangladesh, says a British trade envoy.

“Obviously, infrastructure is a big area for investment,” British Prime Minister’s Trade Envoy to Bangladesh Rushanara Ali MP told the news agency, adding that there were new areas Bangladesh and the UK could work on.

She listed the energy sector, especially renewable energy, and technological cooperation, education and skill sharing as some of the potential areas for cooperation.

“You’ve a very young population increasingly educated. You’re really getting involved in developing new enterprises,” Rushanara said mentioning that the two countries have a lot to do together.

British High Commissioner in Dhaka Alison Blake was, among others, present during Rushanara’s interview with a select group of media.
The British trade envoy said there was a real recognition that basic things such as rail, roads, bridges and airports need investment and partnership with countries to help Bangladesh achieve its ambition of becoming a middle-income country.

Saying that these are related to economic development, Rushanara also laid emphasis on “inclusive development” in Bangladesh.

Talking about investment barriers, she said further improvement in business climate meant that more investors were looking at Bangladesh for future investment, not just from the UK but from other countries. “This is something very important.”

The trade envoy, who is now here on her third visit to Bangladesh representing the British prime minister, said, “Businesses go to countries where environment is conducive to investing and operating. You all know it very well.”

Rushanara said the barriers were well understood and she thinks Bangladeshi people could understand them better than she could describe.

She, however, expressed optimism that they have been working together and a favorable business environment was considerably worked out. “That’s something we’ll keep doing.”

Talking about British-Bangladeshi nationals, she said they have a very high expectation as they have a relationship with this country. “Their origin is here. They’ve a huge amount of commitment to this country.”

Rushanara said sometimes people go away getting disappointed if they get confronted by barriers. “The relationship needs to be protected, cemented and harnessed. We’ve a role to play.”

She laid emphasis on producing high-value garment products and tech business saying there was real potential for partnership.

On the Rohingya issue, the British lawmaker said it was a “terrible tragedy” and the international community needs to increase humanitarian assistance.

“We’ll keep up the pressure. We want to make sure the international community doesn’t turn its eyes way from this severe crisis,” she said, adding that their first priority was to increase assistance.

In February, over 100 British parliamentarians, including Rushanara, said it was time for the UK to state that Myanmar’s military should be referred to the International Criminal Court (ICC) for their appalling “security operations” against the Rohingya, described as ethnic cleansing and possibly genocide by the United Nations.

The parliamentarians wrote to the then British foreign secretary seeking measures in line with their call and calling for an ICC referral for Myanmar’s military general.

ADB doubles commitment for next three years

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ADB doubles commitment for next three years

 

The Asian Development Bank is ready to lend $8.01 billion to Bangladesh over the next three years, almost the double the amount it had committed in the previous three years.

Between 2015 and 2017, the Manila-based multilateral lender committed $4.08 billion.

The ADB has already sent an indicative plan to the government about its intent to bankroll various mega projects with the view to reducing high transport and logistics costs and improving access to domestic, regional and international markets.

It will focus on the development of transport corridors integrating roads, railways and ports in order to ease congestion, improve climate resilience, continue institutional reforms and facilitate trade.

The ADB will continue to support the development of the Dhaka-Chittagong-Cox’s Bazar Railway corridor, add the Dhaka-Southwest road corridor to the pipeline and support investments in the Chittagong Port.

The lender will also support the improvement of public transport in the capital through the Dhaka Metro Rail project and work towards developing high-speed rail corridors, logistics and inland waterways.

In April, an ADB mission visited Bangladesh and held talks with concerned officials, said an official of the Economic Relations Division.

Of the $8.01 billion, $4.33 billion is available for commitment right away. Of the sum, $1.45 billion will be given in 2019, $1.42 billion in 2020 and $1.47 billion in 2021.

Some 31 projects are ready for implementation under this, according to the ERD official.

The remaining $3.68 billion are on standby: $1.18 billion can be used in 2019, $1.23 billion in 2020 and $1.27 billion in 2021.

If projects are ready to roll, funds will be given from the standby allocation, according to the ERD official. The development lender does not approve a project before it is ready.

The ADB’s new lending will be in energy, transport, education, water and urban services, agriculture and rural development.

The bank will provide about $140 million for the Bangladesh-India grid interconnection project, $35 million in technical assistance loan for the Dhaka Metro line-5 (South) and $250 million in investment for the first phase of the same project.

Some $100 million will go towards LNG imports, $200 million for LNG transmission pipeline, $200 million for Dhaka-Chittagong high-speed rail, and $200 million for Dhaka-Chittagong Expressway project.

In 2018, the resource available is $1.64 billion, and ad of July the ADB board has approved $1.19 billion.

Apparel to gain from Sino-US trade row

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Apparel to gain from Sino-US trade row

Bangladesh will be a China-alternative for US brands: survey

Star Business Report

 

The ongoing trade war between the US and China will be beneficial for Bangladesh’s garment sector as the American brands will place more work orders here to branch out their sourcing, according to a new survey.

Respondents in the ‘2018 Fashion Industry Benchmark Study’ expressed more interest in expanding sourcing from Bangladesh in the next two years as they actively seek China alternatives.

Some 75 percent of the respondents said they will source from Bangladesh. It was 61 percent in 2017.

Nearly half of respondents expect to somewhat increase sourcing from Bangladesh through 2020, up from 32 percent in 2017. Another 7 percent expect to strongly increase sourcing there, a record high since 2015.

“The “Made in Bangladesh” label enjoys a prominent price advantage over many other Asian suppliers,” said the study conducted by Sheng Lu, associate professor of the department of fashion and apparel studies of the University of Delware, in collaboration with the United States Fashion Industries Association (USFIA).

Like last year, respondents said Bangladesh offers the most competitive price, followed by Vietnam. Bangladesh was the fifth most preferred sourcing destination among American retailers due to price advantage, up from its previous position of seventh.

However, respondents still regard “risk of compliance” as a notable weakness.

The high level of media and public attention to the social responsibility problems remaining in the Bangladeshi garment industry, such as factory safety and treatment of workers, further adds to the complexity and sensitivity of the issue.

Since compliance is so important to American fashion companies, concerns about the compliance risks involved in sourcing from Bangladesh could hold companies back from giving more orders to the country, the study found.

The survey was conducted in the April-May period, when talks of a trade war by the Trump Administration were high.

For the second year in a row, respondents say the protectionist trade policy agenda in the US is their number one concern — up from a ranking for number 8 and 11 between 2014 and 2016.

China remains the top supplier for most US fashion companies. However, China now accounts for only 11-30 percent of companies’ total sourcing value or volume, compared with 30-50 percent in the past, according to the study.

Consistent with the official US trade statistics, China (100 percent of the respondents) and Vietnam (96 percent) continue to be the two most utilised sourcing destinations, followed by Indonesia (79 percent), India (75 percent), Bangladesh (75 percent) and Cambodia (61 percent).

Tk 1 lakh for each project

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Tk 1 lakh for each project

Jagaran Chakma

 

Some 64 projects, many of which are important infrastructure ones, got just Tk 1 lakh each this fiscal year in a bizarre move by the government that has presented its most expansive development budget yet of Tk 1.80 lakh crore.

People do not benefit from these token allocations as it will further delay the implementation of the projects, said Ahsan H Mansur, executive director of the Policy Research Institute.

“This is misallocation of resources as well as waste of public money,” he added.

Of the 64 projects, 57 are five to eight years old and they were scheduled for completion this June, four are ongoing and the remaining three did not even start work, according to data from the planning ministry.

But the government has indiscriminately allocated Tk 1 lakh to each of these projects without considering their deadline or their importance.

Take the case of the Tk 2,008 crore Shikalbaha 225 megawatt (MW) dual fuel combined cycle power plant, which as of February this year has spent Tk 1,282 crore or 64 percent of its allocation.

But the government has given just Tk 1 lakh to it this fiscal year.

Similarly, the construction of the Bangladesh Railway’s new line for Ishwardi-Pabna-Dhalar Char has got a mere Tk 1 lakh despite the completion of 91 percent of the work as of February.

Another striking case was the construction of the Muradpur-2 Gate and GEC Junction Flyover in Chittagong, a Tk 970 crore project.

As of February, the project is 63 percent through and yet the government gave it only Tk 1 lakh this year.

There are at least six projects on the list with over 90 percent of the works done, with one even 99 percent through.

Another nine projects have finished at least 80 percent of their works.

“This token allocation will keep the projects alive and we will revise those in future,” MA Mannan, state minister for finance and planning, told The Daily Star yesterday.

He, however, acknowledged that in some cases the cost of the projects increased due to delays in implementation.

Mansur said the planning ministry should stop the projects or allocate the necessary funds.

Often, the politicians just want to show that they are working on a big number of projects, so the projects are kept alive by allocating token funds, said AB Mirza Azizul Islam, former adviser to the caretaker government.

“It’s eyewash,” he added.

Towfiqul Islam Khan, research fellow at the Centre for Policy Dialogue, said they have also found some projects that have finished but still got allocations and so did some others that are yet to take off.

Abdus Salam, chairman of the Chittagong Development Authority, suggested Khan might be right.

The Muradpur-2 Gate and GEC Junction Flyover project has already been completed, he said.

“I was surprised to see that the government has allocated Tk 1 lakh for the project in the current fiscal year.”

Be proud of your garment sector

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Be proud of your garment sector

Says outgoing Dutch ambassador

Star Business Report

Bangladesh should be proud that the country has some of the world’s best garment factories, said the outgoing Dutch ambassador in Bangladesh Leoni Cuelenaere yesterday.

Currently, the country has 73 green factories certified by the US Green Building Council and 320 are waiting to be certified by the American organisation. Of the top 10 green factories, seven are in Bangladesh.

“Some of the world’s best factories are located in Bangladesh. Be proud of yourself,” said Cuelenaere at a farewell ceremony accorded to her by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at its office in Dhaka.

After the Rana Plaza building collapse the global focus was on Bangladesh. The global focus is also on Bangladesh now but it is for a positive reason, she said.

Bangladesh supplies 20 percent of the total requirement of garment items to the EU in a year, according to Cuelenaere.

She advised the country to maintain a warm relationship with the EU so that it can continue to enjoy the zero-duty benefit under the GSP plus upon graduation from the least developed country (LDC) bracket in 2027.

Once Bangladesh becomes a developing country, the EU will levy a 12.5 percent duty on export.

However, there is a possibility of continuation of the same duty-free benefit to the EU even after the graduation provided certain conditions are met.

The GSP scheme is awarded to a country which is very much compliant in business, production and in supply chain of the exportable goods.

Bangladesh will have to ratify 27, including four core, conventions of the UN to be eligible for the continued GSP plus benefit to the EU.

BGMEA has accorded the farewell to Cuelenaere recognising her extraordinary advocacy in favour of locally made garment items during the turbulent times for the sector.

After each of the incident, the garment sector faced an image crisis, but the ambassadors of different countries, including the Netherlands, launched massive campaigns in favour of Bangladesh.

The campaign by the envoys helped in brightening the image of the country. Before her departure, the ambassador, who completed her three-year tenure in Dhaka, also said Bangladesh’s garment sector is now safe.

In his recognition speech, Siddiqur Rahman, BGMEA president, highlighted the Dutch ambassador’s contribution in the meetings of three secretaries and five diplomats committee formed to strengthen the safety in the country’s garment sector.

NBR thwarts solar energy march

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NBR thwarts solar energy march

Sohel Parvez

New and ongoing green energy initiatives are set to face spiralling costs in the wake of the shock imposition of value-added tax on the import of solar panels from this fiscal year.

The National Board of Revenue has slapped a 5 percent advance income tax (AIT), 5 percent advance trade VAT and 15 percent VAT on the import of the module. In other words, there would be about 27 percent levy.

The measure by the revenue authority took the industry stakeholders, particularly the solar panel importers and solar system integrators, by surprise as they have been demanding zero duty import benefit to facilitate fast expansion of the green energy.

“Solar home systems will become unaffordable for many because of the latest NBR measure,” said Dipal Barua, president of the Bangladesh Solar and Renewable Energy Association (BSREA), a body for solar panel importers, integrators and producers.

The tax administrator slapped the advance trade VAT and VAT at a time when the government aims to generate 2,000MW of electricity, or 10 percent of total production, through renewable energy by 2020.

A number of solar-based initiatives such as solar irrigation, mini-grids, rooftop-based solar home system and solar power plants are being established in various parts of the country.

Already, 999 solar irrigation schemes, 15 mini-grid and 25MW solar rooftops have been established, according to Sustainable and Renewable Energy Development Authority (SREDA). The SREDA, in a letter to higher ups, said the solar home systems have the most potential for renewable energy generation.

About 52 lakh solar home systems have already been installed, benefitting 12 percent of the total population in off-grid areas.

The agency urged the NBR to waive all sorts of VAT and tax on solar panels and cells.

“The expansion of renewable energy will be seriously affected unless the tax and VAT are withdrawn,” said Infrastructure Development Company Ltd (Idcol), a major financier for renewable energy, in a letter to NBR higher up at the end of last month.

The cost of every solar based project will go up substantially, as a result of which it will be tough to make the schemes financially viable, even after paying financial grant.

As a result it will be difficult to attain the government’s renewable energy target. Besides, large panels are used to generate power through solar energy-based mini-grid, irrigation pump and rooftop systems.

But these plants do not have the capacity to make such type of panels or do not have proper certification, Idcol said.

Better quality solar panels could be imported at prices lower than those of locally assembled panels if import duty and taxes are exempted, it added.

Contacted, Idcol Executive Director and CEO Mahmood Malik said the rise in import cost for the imposition of advance trade VAT and VAT will be beneficial for local assemblers. “But overall, the impact will be negative.”

Idcol is promoting the expansion of solar rooftop systems to generate more energy.

“Solar rooftops will not become attractive. But, there will be huge impact in the long-term if we can generate 400-500MW of electricity from solar rooftops,” he added.

BSREA Treasurer Md Ataur Rahman Sarker said mis-declaration in imports will increase because of the VAT.

Bangladesh requires 50MW equivalent solar panels annually and most of the demand is met through imports because of insufficient domestic production, he said.

NBR Chairman Md Mosharraf Hossain could not be reached for comments despite repeated attempts.