India is exploring Bangladesh’s energy market which would make the country dependent on its largest neighbour for electricity and fuels, officials and experts fear.
The deals signed so far with Indian public and private sector energy utilities in the past one year and the contracts set to be awarded to them have already claimed a major share of the country’s energy sources, they said.
Most of the Indian companies obtained the contracts without tenders which helped them to charge higher prices, the officials said, adding that the contracts were awarded under the Speedy Supply of Power and Energy (Special Provisions) Act 2010 that indemnified officials against any prosecution for awarding contracts without tender.
According to the contracts, Indian companies would supply about 7,500MW power by 2020, nearly 42 per cent of the total electricity supply, a Power Development Board official said.
According to the government plan, about 25 per cent of natural gas and 18 per cent of diesel would be supplied by Indian utilities.
Consumers Association of Bangladesh energy adviser M Shamsul Alam warned that the dependence on India would obstruct national capacity building, both in public and private sectors, and cause a threat to the energy security.
State minister for power, energy and mineral resources Nasrul Hamid, however, found no problem with importing electricity and primary energy.
‘Many conflicting nations are carrying out uninterrupted trade between them for years whereas relations between Bangladesh and India are much friendly now,’ he said.
Energy expert M Tamim, also Bangladesh University of Engineering and Technology petroleum engineering professor, said that the government should pay more attention to the contracts’ technical issues, such as price, reliability and quality of energy to be supplied by Indian utilities.
On April 10, the last day of prime minister Sheikh Hasina’s state visit to New Delhi, Bangladesh’s utilities signed six energy sector deals worth about $9 billion with their Indian counterparts.
Since March 2016, the government have signed four contracts and finalised two more deals to be signed with Indian companies either to build power plants or to buy about 4,500MW electricity, said the officials.
They said that the power division was examining an Indian offer to export another 400MW power to Bangladesh from a coal-fired power plant under construction near Haldia Port in West Bengal.
The government also plans to import about 2,600MW power from Nepal and Bhutan through India, the officials said.
India introduced a guideline in December 2016 that would bar Bangladesh from directly importing electricity from Nepal or Bhutan through Indian territory as the guideline allowed no such electricity transit.
According to the guideline, India would ‘facilitate’ such cross-border trade of electricity through its own agencies who would buy electricity from a neighbouring country and sell it to other neighbour under separate bilateral agreements.
Bangladesh began importing 500MW electricity from India’s western grid from October 2013.
On April 10, 2017, Bangladesh Power Development Board initialled two contracts, one with India’s Adani
Power (Jharkhand) Ltd for importing electricity for 25 years from its 1,600MW power plant to be installed in India and the other with Reliance Bangladesh LNG & Power Ltd to buy electricity for 20 years from its 718MW gas-fired power plant to be installed in Narayanganj.
Both the Indian companies would charge higher tariff comparing to the other local companies, said the officials.
The power board also signed a memorandum of understanding with India’s NTPC Vidyut Vyapar Nigam Ltd to import 500MW power from a hydropower facility to be built in Nepal by India’s private company GMR Ltd, they said.
The Indian company would transmit electricity from Nepal-India border to Bangladesh-India border, the officials said.
The power board also signed a supplementary agreement with the same Indian company to import 60MW power from Palatana gas-fired power plant in Tripura. In March 2016, Bangladesh began import of 100MW power from the facilities.
The 160MW power was surplus in India’s north-eastern provinces and would cost much higher, the officials said.
In March 2016, the government approved a contract to be signed with India’s Shapoorji Pallonji Infrastructure Capital Company to buy electricity from a 220MW power plant to be installed in Bhola.
On April 10, 2017, Bangladesh-India Friendship Power Company signed an agreement worth $1.6 billion with India’s EXIM Bank for the construction of a 1,320MW coal-fired power plant near the Sunderbans drawing widespread protests for potential harm to the world’s largest mangrove forest in Bangladesh side.
The friendship company is a 50-50 joint venture of the power board and India’s National Thermal Power Corporation.
The government also finalised contracts to import 250,000 tonnes of diesel a year from India which would be increased to one million tonnes in near future, the officials said, adding that Bangladesh Petroleum Corporation would pay Indian supplier $5.5 in premium for transportation, evaporation and other losses for each tonne of diesel to be imported.
The corporation, however, pays about $3.5 in premium to import each tonne of diesel from countries in Central Asia and Middle East.
On April 10, Petrobangla signed two memorandums of understanding – one with India’s state-run Petronet LNG Limited and the other with Reliance – for using their facilities to import LNG.
Both the Indian companies are demanding higher charges for regasification of LNG than the charges quoted in the other two contracts Petrobangla signed recently, said the officials.
They said that two contracts would be signed soon to use their facilities to be installed along the country’s coastline to import liquefied natural gas to increase the gas supplies by 1,000 million cubic feet per day, they said, adding that most of the contracts were awarded without tenders.
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