It is good to know that the KfW Development bank is coming forward with €181.5 million as aid to Bangladesh in two very important fields. These include increasing energy efficiency and developing renewable-energy resources in country, and has signed two grant agreements to that effect with the government.This assistance could not have come at a better time, as the government has aggressively been pursuing ambitious targets - economic development andfulfilling the Paris agreement. The issue of renewable energy has been a contentious one in the country as land is a scarce and highly precious commodity. That said, there is a lot of potential for using photovoltaic systems on roofs of buildings in villages, towns and cities.
With regards to increasing energy efficiency in industry, the funds will assist efforts to transform energy-intensive industries in the country by opening the door to concessionary loans. These will go to pay for the replacement of existing machinery with more energy-efficient ones. The idea is to reduce energy consumption in these industries, particularly at a time when energy prices are rising phenomenally. The other benefit from such transformation that comes through is that with adoption of more energy-efficient machinery, CO2 emissions will reduce considerably. The dual effect of this initiative, if implemented properly, will save much-needed primary energy and help keep check on carbon footprint.
The implementing agency, Infrastructure Development Company Limited (IDCOL), has also adopted two programmes that will, in effect, increase the use of renewable energy sources.And that will also combat CO2 emissions in the overall power sector. IDCOL and Bangladesh Infrastructure Finance Fund Limited (BIFFL) will act as conduits for extending low-interest loan facilities to investors in the renewable energy sector. Sub-sector activities will include promotion of off-grid renewable energy like solar irrigation pumps, domestic biogas plants, etc. While it is certainly commendable that these funds are being given as grant, it begs the question why the government, through its own renewable body SREDA isn't spearheading the renewable issue on a much grander scale.
Yes, the multi-million Euro aid package will certainly help, but obviously, much greater emphasis is needed at policy level. The rooftop solar programme should be made mandatory for all government buildings to start with, particularly in urban centres like Dhaka and Chittagong. Once this is done, only then can authorities demand the same from the private sector and permanent residents of cities to follow suit. Similarly, there is no need to explain in detail the benefits of the solar pump for agricultural purposes. IDCOL has had some success with the technology, but as it costs a few hundred thousand Taka to install one, matching funds should come from the government to expedite the process. With diesel prices rising around 50 per cent in one go, solar irrigation makes much more sense from an economic point of view.
While the benefits of these systems are well understood, some systems are still lagging behind. For off-grid photovoltaic systems to really take off, we need "mini-grids" that can take energy produced by the solar systems when not being used in homes, for agriculture or elsewhere. The need to move away from fossil fuels wherever possible should be pursued and funds need to be committed nationally as part of the transformation process. With nearly 95 per cent of the general populace now having access to the national grid, it has become more imperative than others that the grid part of the renewable eco-system is invested in.