Bangladesh’s interim government is set to reinstate fiscal incentives for renewable energy-based power plants to revitalize the renewable energy sector, aiming to attract domestic and foreign investors.

This follows a proposal from Power and Energy Adviser Dr. Mohammad Fouzul Kabir Khan to Finance Adviser Dr. Salehuddin Ahmed, which Dr. Ahmed recently approved.

Under the revised package, renewable energy investors will benefit from income tax exemptions until 2030. This reintroduction follows a shift made by the previous government on June 26, 2023, which replaced full tax exemptions with a graduated tax structure spanning ten years.

The National Board of Revenue (NBR) has facilitated the interim government’s decision, with Chairman Abdur Rahman Khan confirming that they are preparing the necessary regulatory order.

The restored incentives are expected to support investors in new renewable projects as the government prepares to issue various renewable energy initiatives tenders. Mr. Khan stated that the proposal for renewed fiscal benefits comes in light of investor inquiries about potential incentives.

The incentives will include a tax exemption until 2036 for investors who commenced renewable power production by June 2024 and a ten-year tax package for those set to begin by June 2025. The ten-year package offers full tax exemptions for the first five years, followed by 75% and 25% for the subsequent three and two years, respectively.

The interim government’s renewed commitment to renewable energy follows its decision on August 27, 2024, to cancel 42 power-plant projects—37 of which were renewable—signed by the previous administration under the ‘Speedy Enhancement of Power and Energy Supply (Special Provision) Act 2010,’ which was suspended.