Most of the defaulted loans depend on the balance sheet. Banks are obsessed with balance sheet financing. This loan decision is taken over lunch or dinner. Beximco and S Alam are now unable to pay salaries. But looking at the balance sheet, the bank gave loans to these institutions. Asset not found. Now after checking the balance sheet of this organization it is seen that everything is empty. The advisor of the Ministry of Electricity, Energy and Mineral Resources has commented how logical it is to give loans in this way. Muhammad Fawzul Kabir Khan.
He said this at a seminar titled 'Role of Domestic Financial Institutions in Renewable Fuel Conversion' organized at the Economic Reporters Forum (ERF) Auditorium, an organization of journalists of Economy Beat, in the capital Purana Paltan on Saturday (November 30). The seminar was jointly organized by ERF, Center for Environment and Participatory Research, Coastal Livelihood and Environmental Action Network (CLEAN) and BWGED.
Gaurang Nandi, Chairperson of Center for Environment and Participatory Research presented the keynote at the seminar. He proposed setting up a special fund for easy financing. Besides, it is recommended to arrange the sale of excess electricity produced by individual entrepreneurs to the government.
ERF president Refayet Ullah Mirdha presided over the event organized by general secretary of the organization Abul Kashem. Chief Economist and Country Business Manager of The City Bank also spoke at the event. Ashanur Rahman, Clean's Chief Executive Hasan Mehdi and others.
In the seminar, the energy adviser said that there is no alternative to renewable energy. Banks are not interested in lending in this sector. Therefore, in the new policy, the government will provide financing for this sector as well as solar installation sites and connection to transmission lines.
Fawzul Kabir said, the government will buy all the electricity, and I will come out from there. Merchant power policy will be adopted. Investors will generate the electricity and they will fix the customers for sale. Because the government wants to move away from Independent Power Producers (IPPs). Government will buy power from 10 to 20 percent IPP. Because the government is the buyer of IPP, it is not able to pay the money now. The government will withdraw from this policy.
He said that the defaulted loans of the banks are 3 lakh crores. How much of this is renewable energy? Rather mostly in other sectors. But banks have not moved to lend on renewable energy. They are engaged in balance sheet based financing. Recently Beximco and S Alam are not able to pay their employees. Their balance sheets are empty. But their defaulted loans are high. How logical is balance sheet lending, why aren't banks financing renewable energy? The previous government did not sincerely want to solve this problem. It did not even want renewable energy to expand. So funding remains a problem. The interim government will solve this problem through new policies.
The advisor said that ordinary entrepreneurs like entrepreneurs in the renewable energy sector cannot go to such lunches or dinners. As a result, it is not easy for them to get loans. He advised banks to approve loans considering their assets.
Stating that there is no alternative to move the country forward without renewable energy, Fawzul Kabir Khan said that the government will use the unused land of various sectors including railways and roads for the production of renewable energy. A policy will be made for this soon.
He said, “We used to be told that we don't have the space, that we can't install solar for renewable energy.” This is a misconception. Rather, people's land has been forcibly taken and left behind. I want to turn it off. Efforts are underway to use unused land for renewable energy. However, the import duty on renewable energy sector equipment will not be reduced. To develop backward linkage industry at the local level, the government will keep tariffs in this sector.
Fawzul Kabir Khan said that the biggest obstacle to the production of renewable energy is the lack of necessary space. He said that many lands of common people were acquired in the name of construction of economic zone, but nothing was done there. It did not create employment.
Mentioning the financing crisis and lack of technical technology as problems in the production of renewable energy, he said, it is necessary to identify where the real problem of renewable energy is. The current government will use the unused land of various sectors including railways, roads for the production of renewable energy. He also said that the approvals given by the Awami League government for setting up new power plants by applying the Special Powers Act will no longer be applicable.
The energy advisor said the main problem of the country's economy is the lack of competition in government procurement. That's why we decided to make it all open. Now, to do business with the government, ministers and secretaries do not need to be relatives or acquaintances.
Khandkar Golam Moazzem, research director of CPD, said that the financing of the renewable energy sector should be made easier. 18 types of debt instruments are followed globally. Only non-concessional loans are given in Bangladesh. Financial instruments should be increased. The way for foreign investment should be facilitated.
