Uncertainty over recovery of IDCOL's Tk 526 crore loan

In 2003, Infrastructure Development Company Limited (IDCOL) started the Solar Home System (SHS) programme in a bid to provide electricity to millions of families in areas without grid power. At first, this programme got a lot of money from foreign donor organisations. It worked together with local NGOs and microfinance groups to build a big network. This effort, which brought light to many dark homes about 20 years ago, is now in serious trouble. There is doubt about whether the Tk 526 crore loan that was given out can be fully recovered.

According to information from IDCOL, around six million solar home systems were set up over the last two decades. Out of these, IDCOL was directly involved in installing 4.13 million systems. Families of remote areas of the country bought these systems by paying in monthly installments through NGOs and microfinance institutions. More than 100 NGOs and groups worked as main partners with IDCOL. Some big ones included Grameen Shakti, BRAC, and Bandhan.

But after a few years, the quick expansion of regular grid electricity, along with some limits in how the programme worked, caused demand for solar home systems to drop sharply. Solar systems could not compete with the low-cost electricity from the grid. This destroyed the business model of the NGOs. Collecting the money back (debt recovery) became very difficult.

IDCOL gave a total of Tk 4,545 crore as loans for the SHS project. By October 2025, the partner organisations had paid back Tk 3,498 crore to IDCOL. IDCOL also earned Tk 1,117 crore in interest from these partners. At the same time, Tk 614 crore was given to NGOs as grants, and Tk 413 crore was cancelled or waived. Still, Tk 526 crore remains unpaid on the loans.

Problems in recovering the loans

Concerned officials say that in the SHS programme, the partner organisations (POs) were responsible for choosing customers, selling the solar systems on installments, installing them, giving repair services after sale, and collecting the monthly payments. Now, collecting those installments has completely stopped. Consequently, getting back hundreds of crores of taka in outstanding loans has become uncertain. Many NGOs have shut down their work or let go of their staff. Small NGOs in particular have failed to pay back. They could not collect money from customers to repay IDCOL. As a result, the whole system has fallen apart.

Shamsul Islam, the Area Manager of Grameen Shakti in Kishoreganj, said the government asked them to carry out solar power projects all over the country. In Kishoreganj Sadar Upazila alone, about 2,500 home systems were given out on installment plans. But the project work has stopped now. People have also stopped paying their installments. Grameen Shakti still owes a large amount to the government. The Grameen Shakti office in Kishoreganj was closed long ago because the project ended.

A recent nationwide survey conducted by Daily Samakal and the research group Center for Policy Dialogue (CPD) found that most families still like the installment loan system to get solar setups. Overall, more than 73 percent of families picked this option. Self-payment (without loans) is more common among users of IDCOL systems and private rooftop solar. About 43 percent of IDCOL users got their solar connections through installment loans. But only 13 percent of these loan users are still making payments. The average cost of an IDCOL solar home system is around Tk 9,000. In comparison, TR/KABITA systems cost much less, on average under Tk 1,000. Private rooftop solar setups cost more than Tk 23,000 on average.

Difficult situation for NGOs

Seeking anonymity, an official from Grameen Shakti told Daily Samakal, "After grid electricity spread everywhere, our business could not continue. Customers still have the devices, but they are not paying installments. In this situation, we cannot repay the loans to IDCOL." 

An official from BRAC said, "We are trying hard to repay the loans. But in reality at the field level, collecting loan payments has dropped a lot."

Bandhan was a major partner NGO in North Bengal and the Char areas. Some former employees said the organisation is now almost ineffective. Customers no longer get service for their solar systems, and the NGO cannot repay its loans.

Unhappiness among consumers

Many users stopped using their solar systems after grid electricity reached their areas. Since service centers closed, they cannot get repairs anymore. And for this, many stopped paying installments, which put the NGOs in even more trouble.

Nur Alam Talukder lives in Betmor village, Chakamiya union, Kalapara upazila, Patuakhali. He works as a daily labourer. Thirteen years ago, one night his daughter got burned by a fire from a kerosene lamp. The next morning, he decided to get a solar system from Grameen Shakti. The company told him the system would cost Tk 14,500 on installments while it is Tk 11,500 if paid in full cash. On April 22, 2013, he paid Tk 11,500 in cash and got the solar system at home. It was connected in his son Md. Kamal's name. That evening, company workers came and set it up. But on March 6, 2025, a notice arrived asking to pay an outstanding amount. It was in the name of his son Md. Kamal, and the due amount shown was Tk 6,829. The notice said if payment was not made within 15 days, a legal case would be filed under the current laws.

Nur Alam said he paid Tk 11,500 in cash to a Grameen Shakti employee and got the connection. So why is a notice coming now for installment dues? Md. Khashrul Alam, Recovery Officer of Grameen Shakti, said, "We sent notices to all customers who have unpaid solar amounts. Those who paid in full cash should not get notices and should have no dues. I will check this matter." 

He added, "The government decided that rural electricity lines would not go to places with solar. But since there were no rural electricity customers in many rural areas, the government ordered the removal of solar services. That is why we stopped solar services through IDCOL and closed all offices. Now there is only one office at the district level."

What experts say

Electricity experts think that without good planning, expanding the grid on one side and running off-grid projects on the other created this double problem. They say the lack of coordination between grid and off-grid work has left crores of taka in loans unpaid.

Energy expert Professor M Tamim said this project was very important and new at the start. But the government did not make any alternative plan while expanding grid electricity. As a result, both the investments and the recovery of loans are now at risk.