Frequently Asked Questions

Renewable Energy Projects

1. What is IDCOL Solar Programme?

IDCOL promotes dissemination SHSs under the Rural Electrification and Renewable Energy Development Project (REREDP) jointly financed by the International Development Agency (IDA), Global Environment Facility (GEF), KfW and GTZ over 2002 to 2009. IDCOL is implementing the programme through participation of several partner organizations (POs). SHSs are sold (mostly through micro-credit) by POs to the households and business entities in the remote and rural areas of Bangladesh. IDCOL provides refinancing facility and channel grants to the POs to reduce the SHSs costs, ensure affordability of the poor people as well as to support the institutional development of the POs.

IDCOL has achieved the target installation of 50,000 SHSs in August 2005, three years ahead of the project completion period and US $ 2.0 million below estimated project cost. Following the success of IDCOL’s solar program, the IDA has extended further support for financing of additional 60,000 SHSs. KfW has also signed a Finance and Program Agreement to provide EUR 16.5 million as grant to government to be used for further expansion of the program. To mitigate the gap between IDA and KfW financing, GTZ is providing grant financing for 28,000 SHSs. In total, IDCOL will finance 200,000 SHSs by 2009. Up to November 2006, more than 90,000 SHSs have been installed under the program with a monthly average installation of 3,500 systems.

For details, click Overview of IDCOL Solar Programme

2.How can I become a SHS Partner Organization?

There are three types of Partner Organizations (POs) under IDCOL SHS Programme:

a. Supplier PO: A PO that supplies approved SHS equipment and provides after sales services to the households in its project area(s).
b. Lender PO: A PO that extends loans or micro-credit to the households to purchase SHS in its project area(s) and provides after sales services.
c. Supplier and Lender PO: A PO that supplies approved SHS equipment, extends loans or micro-credit to the households to purchase SHS in its project area(s) and provides after sales services.

Following satisfaction of the required criteria, the interested applicant may apply in any of the above categories. The role of the PO is to select project areas and potential customers, extend loans, install the system and provide after sales services to the households. IDCOL, time to time, invites application from interested organizations to participate in the programme. The Expression of Interest (EOI) is published in the daily newspapers and in the website www.idcol.org. The selected applicant has to enter into a Participation Agreements (PA) with IDCOL to participate in the Solar Programme.
Draft Participation Agreements
Contact address and list of the existing POs

3.How can I enlist equipment under IDCOL Solar Programme?

The Solar Home System (SHS) equipment supplier/manufacturer may enlist their products (photo-voltaic modules and other SHS components) under IDCOL Solar Programme by the following procedures:

a. SHS equipment supplier/manufacturer has to meet the technical specifications for photo-voltaic modules and other SHS components formulated by IDCOL’s Technical Standards Committee (TSC). TSC comprises members from university, Rural Electrification Board (REB), Local Government Engineering Department (LGED) and IDCOL. Interested equipment supplier/manufacturer has to apply for enlistment of their equipment in prescribed form to the TSC. TSC evaluates the technical standards of the proposed equipment and consider for use under IDCOL SHS program.
Download technical specifications for SHS
Approved equipment list

b. Once approved, the supplier/manufacturer can sell its enlisted equipment to IDCOL’s SHS Partner Organizations (POs).
Contact address and list of the existing POs

4. How a Partner Organization is selected under IDCOL SHS Programme?

IDCOL formed an independent selection committee for selection of POs under IDCOL SHS Programme. The committee comprises members from Bangladesh Institute of Development Studies (BIDS), Palli Karma Sahayak Foundation (PKSF), Economic Relations Division (ERD), NGO Affairs Bureau and IDCOL. POs are selected based on their experience in microfinance programme and renewable energy, financial performance, institutional capacity, familiarity in the program area and linkage and network with various organizations.

5. What benefits/ incentives IDCOL offers to its SHS Partner Organizations?

IDCOL provides two types of grant to its POs. Between the POs, Supplier PO and Lender/Supplier and Lender PO, the former receives capital buy down grant to reduce the cost of approved solar equipment whereas, the latter receives capital buy down grant, institutional capacity building grant and refinancing. IDCOL offers soft loans with 10-year maturity having 2-year grace period at 6% interest per annum to its Lender/ Supplier and Lender POs to manage its loans and micro-credit services in the solar programme. IDCOL loan covers 80% of the micro-credit extended by its PO, to the households for purchasing SHSs. Usually, IDCOL does not require any collateral or security for the loan, except for a lien created on the project accounts. In addition, IDCOL also provides technical, logistic, promotional and training assistance to the POs.

For details, click Overview of IDCOL Solar Programme

6. What are the responsibilities of the POs?

The responsibilities of the POs are:
a. To select project areas for the Solar programme.
b. To identify potential customers in the project areas.
c. To extend loans or micro-credit to the households for purchase of SHS.
d. To provide installation, after sales services of SHS to the households in the project areas.
e. To recover loans and repay IDCOL’s refinancing.

7.What is the potential of SHS Programme?

IDCOL’s Solar Energy Programme is one of the fastest growing renewable energy programs in the world and is expected to change lives in remote rural areas of Bangladesh through providing access to electricity. According to IDCOL’s estimation, there is demand for 1 million SHSs in the remote rural areas of the country.

For details, click Overview of IDCOL Solar Programme