Bangladesh turns to solar as Middle East crisis drives energy risks

DHAKA, May 6 (Reuters) - Bangladesh has floated tenders for 495 megawatts of solar power, stepping up efforts to cut its reliance on imported fuel as the Iran war drives a global surge in energy prices.

The Bangladesh Power Development Board has invited bids for 10 grid-connected solar projects, each ranging from 25 MW to 100 MW.

Private investors will develop the plants, which are planned near existing substations to support grid stability and reduce strain on fossil fuel-based power generation. Final bid submissions are due on June 28, BPDB officials said.

Though Bangladesh has previously set renewable energy expansion targets, progress has been slow. But heightened geopolitical uncertainty is now adding urgency.

The South Asian nation of about 175 million people depends heavily on imported oil, coal and liquefied natural gas, leaving it vulnerable to global price swings.

Fuel shortages resulting from the Iran war and the effective closure of the Strait of Hormuz have prompted the government to scramble for alternative energy sources, while introducing measures such as fuel rationing and shorter office hours.

Officials said expanding solar capacity is critical to ensuring a more stable and affordable electricity supply while reducing exposure to volatile fuel markets.

The government has also approved tax incentives to facilitate imports of fully electric vehicles - including buses and trucks - expanding on earlier approval for electric school buses.

Analysts, however, said the push for solar power and electric vehicles will require major investment in grids, storage and charging facilities.