STAR BUSINESS REPORT

The Centre for Policy Dialogue (CPD) yesterday urged the interim government to review its cancellation of 31 letters of intent (LOI) which the past regime signed with potential investors of solar power projects without adopting any tender process.

A letter of intent is a document outlining the preliminary understanding between two or more parties who intend to enter into a formal agreement.

It is essentially a blueprint for a deal, setting out key terms and conditions before a legally binding contract is finalised.

The CPD said most of the investors had made investments and purchased land, but now can recoup neither of those.

On the other hand, the government floated tenders seeking bidders interested in setting up solar plants, but the number of bids has been very low, it said.

In such a situation, the CPD said the government should renegotiate with the investors of the cancelled projects to reduce the costs mentioned in the letters of intent as per the current market situation.

“Since a number of transitions took place and a government gave them primary approval means the government almost agreed to purchase power from them,” said Khondaker Golam Moazzem, research director at the CPD.

“Some companies have invested in this direction. In such a situation, we think the projects may be reviewed,” he said.

He said the review does not mean the revival and acceptance of those letters of intent, but rather an analysis of the purchase prices and costs with current trends.

Some of the projects were initiated in 2017 or 2019, when the prices of power from solar were quite high, said Moazzem.

“The interim government should have an interim arrangement to accelerate the renewable energy establishments…investors have already invested around $300 million from foreign lenders through banking channels for these projects,” he added.

Moazzem said the letters of intent which genuinely deserve merit should be taken up for implementation while those with political intent may be taken up for revisions.

Those 31 projects represent 3,287 megawatts of solar power and involve potential foreign investment worth $6 billion, according