IDCOL returns Tk 210 crore to Yunus-founded Grameen Shakti from a settled loan account

Grameen Shakti has received Tk 210.25 crore from the state-owned Infrastructure Development Company Limited (IDCOL) as a refund, even though its solar loan account had already been fully paid off and closed. The funds were released after Dr Muhammad Yunus, founder of Grameen Shakti, became Chief Adviser of the interim government. A 2024 audit report of IDCOL, which operates under the Economic Relations Division (ERD), has described the transaction as a serious financial irregularity and an unprecedented conflict of interest.

When Grameen Shakti first took out the solar loan, Muhammad Fouzul Kabir Khan was the Managing Director of IDCOL. Later, in the interim government led by Dr Yunus, Khan was appointed an adviser overseeing the Ministry of Power, Energy and Mineral Resources, along with several other key ministries. The controversial refund was processed while both men held top policymaking positions in the government.

The audit report noted that under standard financial practice, a lender may waive part of the accrued interest in an effort to recover an overdue loan. However, refunding billions of taka after a loan has been fully repaid and the account closed is unprecedented in the country's financial history. The audit team said that granting waivers and issuing cash refunds after the loan had been fully settled violated the loan agreement and financial regulations, resulting in a direct loss of Tk 210.25 crore to IDCOL. The report recommended that the disbursed funds be recovered immediately and deposited into the government exchequer.

Background of loan disbursement and settlement

According to IDCOL documents, the Solar Home System (SHS) programme was launched in January 2003 with financing from the government and international development partners to bring electricity to off-grid rural areas. Under the initiative, IDCOL disbursed a total of Tk 4,545 crore in loans to 53 partner organisations. While 42 institutions settled their debts in compliance with regulations, nine organisations defaulted, leaving Tk 523.50 crore in unpaid dues. Grameen Shakti, Rural Services Foundation (RSF), and Srijony Bangladesh were the top three defaulters.

Although Grameen Shakti obtained concessional loans on easy terms from IDCOL, it allegedly sold solar home systems to its microcredit clients on instalment plans carrying high interest rates. Despite collecting instalments from its clients, the organisation failed to repay IDCOL for years. By February 2024, Grameen Shakti's overdue loan with IDCOL had reached Tk 396.93 crore. Following repeated recovery efforts by IDCOL, Grameen Shakti paid Tk 391.95 crore in a single instalment on 11 March 2024, without receiving any waiver, and settled the loan account.

How funds were returned after account closure

Following the change of government in August 2024, Dr Yunus became Chief Adviser of the interim government. Just a month later, on 12 September, Grameen Shakti wrote to IDCOL seeking a 50 percent waiver on the loan amount outstanding as of 31 December 2022, along with a refund of Tk 210.25 crore from the amount it had already paid.

Despite the loan account having been closed months earlier, the application was approved swiftly. On 30 April 2025, IDCOL approved a loan waiver and write-off of Tk 210.25 crore on paper. On 20 May, IDCOL transferred the Tk 210.25 crore in cash to Grameen Shakti through the banking channel via Real-Time Gross Settlement (RTGS).

IDCOL’s defence and audit objections

In its defence, IDCOL said partner organisations had faced serious difficulties because of the rapid expansion of the Rural Electrification Board's grid, the government's free distribution of solar units under social safety-net programmes, and unregulated market competition. In light of these challenges, IDCOL's 292nd board meeting on 6 June 2022 approved partial debt waivers for 39 institutions after obtaining approval from the ERD and Bangladesh Bank. Grameen Shakti was among five organisations that were not included in that relief package.

IDCOL claimed that after Grameen Shakti applied citing unrecovered loans at the field level, its 318th board meeting on 6 November 2024 approved the waiver and refund in principle. Subsequently, the ERD conveyed government clearance on 25 February 2025, and Bangladesh Bank gave its no-objection certificate on 10 March. Following a favourable opinion from the law firm Law Valley and a notarised undertaking from Grameen Shakti, the 324th board meeting gave final approval on 30 April 2025. IDCOL maintained that no laws were broken.

However, the audit team rejected IDCOL's explanation. The report stated that there is no legal basis for reopening a fully settled loan account to grant retrospective waivers or issue refunds. IDCOL failed to present any clause from the original credit agreement or valid financial documentation to substantiate the move.

The auditors said the decision raised serious concerns about financial discipline and corporate governance, given that the founder of the beneficiary organisation was leading the government while Muhammad Fouzul Kabir Khan, who had previously served as IDCOL's managing director during the loan disbursement period, remained in office as a government adviser. The audit team called for the immediate recovery of Tk 210.25 crore and its return to the state treasury, alongside appropriate administrative measures.

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​Writer: Editor, Dhaka Papers
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