CPD: Tax Incentives and Import Duty Reductions Essential for Attracting Chinese Investment

The Centre for Policy Dialogue (CPD) highlighted essential strategies on Thursday for Bangladesh to attract Chinese investment in its renewable energy sector. Key measures include offering tax incentives, lowering import duties, and simplifying documentation processes. Khondaker Golam Moazzem, research director at CPD, presented these recommendations during an event in Dhaka, where experts discussed increasing Chinese participation, especially in solar energy projects, as reported by UNB. The event, co-organized with the Bangladesh-China Renewable Energy Forum, gathered policymakers, industry leaders, and financial experts to explore ways to enhance foreign investment in renewable energy.

Moazzem's presentation, titled "Overseas Investment in the Renewable Energy Sector: How to Attract Chinese Investment in Bangladesh?", underscored the importance of green bonds and public-private partnerships to finance renewable initiatives. He noted that the recent cancellation of 37 renewable power plant approvals by Bangladesh's interim government created new opportunities for Chinese investment.

Additionally, CPD mentioned that the government plans to establish 10 grid-connected solar power plants through private sector initiatives, which could serve as a significant test case for Chinese involvement. 

Bangladesh has ambitious goals to meet 40% of its energy needs from renewable sources by 2041, which will require an estimated investment of $1.5 to $1.71 billion. 

China, as the world's largest investor in renewable energy, invested around $676 billion in clean energy in 2023, accounting for 38% of the global total. This positions China as a vital partner in helping Bangladesh achieve its energy objectives.

Earlier, Chief Adviser of the interim government, Prof Muhammad Yunus, urged Chinese Ambassador to Dhaka Yao Wen to consider relocating some of China's solar panel manufacturing facilities to Bangladesh. During Yunus's recent visit to the UNGA, Chinese Foreign Minister Wang Yi expressed China's interest in investing in solar panels in Bangladesh and strengthening trade and economic relations.

Among the speakers at the event were Md Abdur Rahman Khan, chairman of the National Board of Revenue (NBR); Chowdhury Liakat Ali, director of the Sustainable Finance Department at Bangladesh Bank; Md. Ariful Hoque, director general of the Bangladesh Investment Development Authority (BIDA); Syeda Afzalun Nessa, head of sustainability at HSBC; Md Shahidur Rahman, country manager for Jinko Solar Bangladesh; Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA); and Gan Peng, chairman of Chint Solar (Bangladesh) Co. Ltd. Fahmida Khatun, executive director of CPD, moderated the event.