Dutch development bank FMO has proposed a $4.8 million investment in Scatec Solar Bangladesh BV, a company incorporated in the Netherlands and 100% owner of Bangla Sun Solar Energy Limited, according to a disclosure.
Scatec Solar and local player Rahimafrooz Renewable Energy Ltd are developing a 62 MW solar PV plant located in the Baispukur village in the Nilphamari northern district of Bangladesh (the project).
FMO said that the financing will be used for the development of the project that will be one of the first large scale solar PV plants in the country upon its completion.
“By funding this project, FMO can enable direct economic growth during the construction and operations of the project and indirect growth by providing a reliable electricity supply. The funding touches some of FMO’s key focus segments, Renewable Energy and Inclusive Development and allows FMO to build out renewable energy capacity in a market which today is still dominated by thermal power plants,” the Dutch lender said in the disclosure.
The project, which is expected to generate an average of 86 GWh of electricity annually, can assist Bangladesh in growing its power capacity with renewable sources to cover the rapidly growing energy demand.
Bangladesh has abundant solar resource availability. Under its Power System Master Plan 2016, the country aims to add 2,000 MW renewable energy projects by 2021 and has been working on creating an enabling environment for potential investors and lenders to invest in the sector.
Last year, the Dutch development bank proposed a senior unsecured loan worth $7.5 million for Bangladesh-based social enterprise Sajida Foundation. Sajida is the seventh-largest microfinance institution in Bangladesh with $199 million in total assets and $34 million in equity by the third quarter of 2019. It has 199 branches serving more than 340,000 customers during the period.
In the energy sector, most recently, FMO has proposed a $6.5 million investment in Vietnamese renewable energy company TTC Energy, a part of Thanh Thanh Cong Group and one of Vietnam’s leading solar conglomerates.