A 100MW solar power project in Madarganj, Jamalpur, is facing both cost and time overruns, with the three-year project now stretching to nearly six years and its cost set to rise by Tk101.84 crore.
A second revised proposal for the project will be placed before the Executive Committee of the National Economic Council (Ecnec) on Wednesday.
The implementing agency, Rural Power Company Limited (RPCL), said construction slowed after representatives of the Indian contractor left the project site following the July 2024 mass uprising, disbursement of loan funds from India’s Exim Bank was suspended for several months, and flooding disrupted work.
The agency also cited an increase in the foreign exchange rate as a major reason behind the rise in project costs.
According to the proposed second revised development project proposal (DPP), the project period, which began on 1 September 2021, is proposed to be extended until 30 June 2027.
Under the original plan, the project was scheduled to be completed by 31 August 2024. The first revision later extended the deadline to 31 August 2025, but the work remained unfinished.
The project cost was initially estimated at Tk1,511.79 crore. In the first revision, it was slightly reduced to Tk1,510.16 crore. The second revision proposes raising the cost to Tk1,612.01 crore, an increase of Tk101.84 crore, or 6.74 per cent, from the first revised estimate.
Project documents show that the increase is largely linked to higher foreign loan requirements. The project loan is proposed to rise to Tk1,248.96 crore from Tk1,140.18 crore, an increase of Tk108.78 crore.
Meanwhile, government funding is proposed to be reduced by Tk3.49 crore and the implementing agency’s own financing by Tk3.46 crore.
Explaining the delay, RPCL said representatives of the Indian engineering, procurement and construction (EPC) contractor and the local subcontractor responsible for land development and embankment construction left the project site on 3 August 2024.
The agency said it took around four months to appoint new subcontractors and resume work, delaying land development and embankment construction.
Construction was further affected after payment against the EPC contractor’s running bills from India’s Exim Bank remained suspended for four months, from December 2024 to March 2025.
The project also includes construction of a 47-kilometre 132kV transmission line from the Madarganj solar power plant to the Ghatail grid substation.
According to project documents, contractors could not carry out piling and casting work for the transmission line between July and September 2024 due to flooding, delaying the work.
Another factor behind the higher cost is the depreciation of the local currency. The original and first revised DPPs calculated the exchange rate at Tk84.80 per US dollar. However, the second revised proposal uses an exchange rate of Tk110.50 per dollar based on the supplementary loan agreement.
According to Planning Commission data, the project had achieved 38.44 per cent financial progress and 56.15 per cent physical progress as of May 2026.
RPCL said the project, once completed, will add 100MW of renewable energy to the national grid. The plant is expected to generate around 178,274 megawatt-hours of solar electricity annually.
The Planning Commission has recommended extending the project period and increasing the cost, saying the project would reduce dependence on fossil fuels, lower carbon emissions and increase the supply of renewable energy to the national grid.
