Infrastructure Development Company Limited Solar Home System Program: A Sustainable Solution for Energizing Rural Bangladesh

Abstract

Infrastructure Development Company Limited (IDCOL) began with a mission to generate investment for infrastructure, renewable energy (RE) and energy-efficient projects in Bangladesh through public–private partnership initiatives. IDCOL started its RE activities in 2003 with a programme named solar home system (SHS). With an installed capacity of 185 MWp, SHSs are positioned in remote areas where grid expansion is difficult and costly. The aim is to ensure access to clean electricity for power-starved off-grid rural communities, which previously relied on kerosene lamps for lighting purposes. The case starts with a depiction of the energy sector in Bangladesh and an overview of IDCOL. The four dimensions of 4A framework are applied to the SHS business model to discuss how it has enriched the lives of more than 12 per cent of the population. IDCOL is expected to face a decline in investments in the RE sector as this flagship SHS Program is currently under threat of becoming non-existent. The case broaches the subject on how IDCOL plans to position itself amidst the dilemma of Bangladesh’s changing market.

Dilemma

Due the free distribution of SHS by the Government of Bangladesh (GOB) under its safety net programme, IDCOL is expected to face a decline in investments in the RE sector as this flagship SHS Program is currently under threat of becoming non-existent. The case broaches the subject on how IDCOL plans to position itself amidst the dilemma of Bangladesh’s changing market.

Theory: 4A framework applied to the Solar Home System business model

Type of the Case: Problem-solving, secondary data

Protagonist: NA

Options

Softer financing, expansion in other use segments, developing newer products and exploring different projects, entering markets in other countries

Discussions and Case Questions

Should IDCOL enter a new market in Bangladesh? Should they invest primarily in grid-connected solar projects and roof-top solar projects under its RE program? Should the firm diversify its portfolio by including industrial energy efficiency, power generation, shipbuilding and shipyard, IT and telecommunication, ports, social and tourism infrastructure and infrastructure backward linkage projects? International advisory service and energy from waste are also lucrative options.