The government is likely to extend the tax waiver for power plant sponsors by five years as many power projects might miss the tax privilege for failure in their commissioning within the timeframe for the facility.
State-owned Bangladesh Power Development Board (BPDB) has already sought extension of the tax waiver facility until December 31, 2024 from December 31, 2019.In a recent letter to the Power Division, BPDB Secretary Mina Masud Uzzaman said many large power projects might fail to be commissioned by December 2019 timeframe and miss the tax facility provided under the Statutory Regulatory Order (SRO)-211.
“Most of the power purchase agreements with the private sponsors contain an assurance of providing tax waiver facilities. Power plants missing the tax facility will push up electricity tariff,” the BPDB secretary said.
The SRO-246, which came into effect in 2016, makes private power producers eligible for a 15-year tax waiver. Besides, the foreign power sponsors are enjoying a three-year income tax waiver facility in Bangladesh.
Recently, three mega power plants sponsored by Reliance Bangladesh LNG and Power Ltd, Summit Meghnaghat-2 Power Company Ltd and the Consortium of Unit Hotel requested PDB to take necessary steps to extend the tax waiver facility.
The power plants, having the capacity to generate 1885MW of electricity, will commission between 2023 and 2024.
The government is expecting to commission 12 power plants having the capacity to generate 3160MW between 2019 and 2021.Besides, another 12 large power plants, having the capacity to generate 3964MW of electricity, are at the implementation level. The government is also implementing nine liquid fuel-based power plants having the capacity to generate 1012MW of electricity.
Implementation of most of the coal-fired power plants with a combined capacity to generate over 20,000MW of electricity is also progressing slowly.