As the government has cancelled the 200MW Teknaf Solar Park project following SunEdison's failure to implement it as per schedule, the executing agency has moved to the International Court of Arbitration, challenging the government's decision.
Sources at the power division said SunEdison had been assigned with the task to implement the 200MW grid-tied solar park, the country's first-ever large-scale renewable energy project, which was scheduled to end by July 2018.
"But SunEdison could not make any substantial progress in its implementation. That is why the government in April issued a 'notice' to the firm, intending to terminate the agreement," said Mohammad Alauddin, a joint secretary of the power division.
Replying to the government, SunEdison sent a “notice of dispute” as well as a legal notice in July, to settle the issue through arbitration as per 19(b) of Power Purchase Agreement (PPA), said officials of state-owned Power Development Board (PDB).
The officials of PDB responded to the notices and now the issue remains pending with the International Court of Arbitration.
As agreed, PDB was supposed to purchase electricity at 17 cents (equivalent to Tk 13.26) per unit from the solar park.
The government had estimated to buy approximately 6482.4 million units of electricity from the firm over a period of 20-years at an estimated cost of Tk 8,595.66 crore.
Seeking anonymity a top official of the power division said, SunEdison had obtained the project on an unsolicited basis with much higher tariff compared to other similar projects, but failed to prove its efficiency.
The firm had been struggling with the project since it received the Cabinet Purchase Committee's approval on October 1, 2015.
SunEdison became bankrupt in 2016, plunging into big financial crisis and even failed to purchase required land in Teknaf upazila for the project.
Some local firms came to rescue the firm by arranging 700 acres of land for the project, the power division officials noted.
As per the deal, the US firm was supposed to set up the park as an independent power producer (IPP) investing about $300 million.
PDB officials said private solar plants have been part of the government's plan to generate 24,000MW of electricity by 2021, of which a certain portion will come from renewable energy.
They said special emphasis was laid on power production from non-conventional sources like solar photovoltaic and wind.
The government has aimed to increase the total solar power production to 2,000MW by 2020.
But the total solar power production in Bangladesh has not crossed 300 MW yet.