Bangladesh offers renewable energy projects a ten-year tax exemption

DHAKA: Bangladesh is offering a 10-year tax exemption program for renewable energy production to increase clean electricity generation, which is still expensive.
This Monday, the National Board of Revenue notified projects that will commence commercial operations by mid-2030.
Renewable energy facilities receive 100% tax exemption for five years, 50% for three years, and 25% for two years.

“Companies whose commercial production will start between July 1, 2025, and June 30, 2030, are exempt from the tax,” NBR chairman Abdur Rahman Khan said of the waivers.

The program reverses the previous government’s 2023 decision to remove renewable energy tax advantages, which deterred local and foreign businesses.

“It’s a very timely and beneficial initiative… it will create confidence among investors,” Dr. S.M. Nasif Shams, Dhaka University Institute of Energy director and Bangladesh Solar Energy Society secretary, told Arab News.

It’s encouraging that this interim government made this renewable energy sector-boosting choice so quickly. The decision also aligns with Prof. Yunus’ global ‘three zero’ concept.

When former Prime Minister Sheikh Hasina resigned and fled violent protests in August, a caretaker administration took over.

Muhammad Yunus, Nobel Peace Prize laureate and economics professor who pioneered microcredit, leads it and promotes zero poverty, unemployment, and carbon emissions.

Bangladesh wants to reach net-zero emissions by 2050, but its renewable electricity generation capacity is 1.38 GW, or 5%, predominantly from fossil fuels like natural gas.

Bangladesh has been grappling with energy issues for a long time, as the country’s demand has been growing at a rate of approximately 7% annually due to an increase in household and business consumption. This has resulted in an increased reliance on imports due to inadequate local production and low renewable energy generation.

Investor tax waivers might lower the high cost of building clean energy plants, a major barrier to renewable sector growth.

“This decision will help the country’s economy and save the environment sustainably,” Sham remarked.

We must use renewable energy. Nothing else exists for us.”