Statutory Landscape for Energy Investment
Key Regulatory Authorities
| Authority | Primary Function | Statutory Basis |
|---|---|---|
| BPDB | Single Buyer / Off-taker | Electricity Act 2018 |
| BERC | Tariff Fixation & Licensing | BERC Act 2003, Sec 22 |
| Power Division | Policy Formulation | Rules of Business 1996 |
| BIDA | Investment Registration | BIDA Act 2016 |
The Power Purchase Agreement (PPA) Structure
The PPA is the central commercial contract between the Independent Power Producer (IPP) and the Bangladesh Power Development Board (BPDB). Under Section 28 of the Electricity Act 2018, the government may enter into special contracts for power generation. Key clauses typically include Take-or-Pay obligations, Force Majeure protections, and International Arbitration (LCIA or ICC) seats.
Licensing and Compliance Requirements
- Generation License: Mandatory under Section 18 of the BERC Act 2003.
- Environmental Clearance: Required from the Department of Environment (DoE) under the Environment Conservation Act 1995.
- Foreign Loan Approval: Under the Foreign Exchange Regulation Act 1947, all external commercial borrowings (ECB) require Bangladesh Bank approval via BIDA.
- Tax Incentives: Exemption on income from power generation for specified periods as per SROs issued under the Income Tax Act 2023.
Consult Barrister Liton Asaduzzaman Sarkar
For specialized legal due diligence, PPA negotiation, and regulatory compliance in the Bangladesh Energy Sector.
Schedule Scoping MeetingFrequently Asked Questions
What is the statutory basis for tariff determination in Bangladesh?
Tariff determination is governed by Section 34 of the Bangladesh Energy Regulatory Commission (BERC) Act 2003, which empowers the Commission to set tariffs for generation, transmission, and distribution.
Are foreign investors protected against nationalization in the energy sector?
Yes, protection against nationalization and expropriation is provided under Section 7 of the Foreign Private Investment (Promotion and Protection) Act 1980, ensuring fair and equitable compensation.
Which law governs the environmental compliance for power plants?
Environmental compliance is mandated by the Bangladesh Environment Conservation Act 1995 and the Environment Conservation Rules 2023, requiring an Environmental Impact Assessment (EIA) for 'Red Category' projects.
◆ Related Statutory Guides & Practice Insights
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