Bangladesh Offers Major Tax Incentives for Coal-fired Power Projects

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Bangladesh announced that it will offer a 15-year tax break for coal-fired generation projects. This follows the World Bank's announcement that it will not offer financial assistance to coal-fired power projects in Bangladesh and other developing countries, except in rare cases.

The country's National Board of Revenue is reported to have said that any company signing a development contract before June 20, 2020, and starting power generation from new coal-fired assets by June 30, 2023, will qualify for the tax waiver.

Bangladesh is planning to reduce its dependence on gas-fired power and increase coal-fired generation, sourcing the fuel feed by using domestic coal deposits and imported stock. Currently, coal accounts for 2% of total power generation capacity, and the government plans to increase coal's share to 24%.

The new tax incentives include benefits such as a three-year waiver for non-nationals working at coal-fired plants.

As part of its new energy strategy, the World Bank aims to further efforts to help countries to develop national and regional markets for natural gas and increase support for hydropower.

For related information, see February 18, 2013, article - Bangladesh Funds 1,675 Megawatts of New Power with Export Credits.

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