Bangladesh has restored the payment guarantee provision for renewable energy projects, nearly two years after it was removed, in a move aimed at attracting local and foreign investment and improving access to project financing.
The absence of a government payment guarantee had discouraged local banks, international lenders and multilateral institutions from financing renewable power projects, resulting in weak participation in several tenders.
The Power Division has recently instructed the Bangladesh Power Development Board (BPDB) to include payment guarantees in future tender documents for renewable energy projects.
BPDB Director Golam Mortuza said the measure was a longstanding demand from private investors and would help attract investment in the sector.
Renewable energy developers said payment security is a key requirement for international lenders and that restoring the guarantee would improve the bankability of utility-scale solar projects and facilitate long-term financing.
