Bangladesh inks 35-year agreement with India to ease power shortages

Dhaka: Energy-starved Bangladesh has signed a landmark 35-year power transmission agreement with India, paving way for imports of 250 megawatts (MW) of electricity from its neighbour.

The agreement will be effective from late 2012 and in line with a deal reached during Prime Minister Shaikh Hasina's maiden New Delhi tour last January.

The state-run Bangladesh Power Development Board (BPDB) inked the bulk power transmission treaty with Power Grid Corporation of India Ltd (PGCIL) at a ceremony witnessed by Bangladesh's Finance Minister Abdul Ma'al Abdul Muhith, Shaikh Hasina's energy adviser Tawfique-e-Elahi Chowdhury, and officials of both countries.

The agreement keeps the provision for Bangladesh to export power to India in the future.

The PGCIL was tasked to construct, own, operate and maintain a 400-KV double-circuit line to transmit 500MW of power between the two neighbouring countries soon after the system is launched.

"It's [the agreement] a small step but a greater thought in regional cooperation through which the South Asian countries will immensely benefit," Muhith said.

According to the agreement, the transmission tariff will be fixed later by the Energy Regulatory Commission of West Bengal while the BPDB will pay the transmission tariff on a monthly basis.

Bangladesh and India recently signed a memorandum of understanding to instal a two-unit 1,320 megawatt coal-fired power plant on a 50:50 equity basis by 2015. It will run on imported coal and be operated by the NTPC.

Bangladesh currently faces an electricity shortage of 1,500 to 1,800MW on an average against the de-rated capacity of 4,500MW in 132 state-run and private units.