Bangla, India sign landmark power deal

Energy-starved Bangladesh has inked a landmark 35-year power transmission deal with India for the import of 250 megawatt electricity.

The import of power is expected to start by late 2012. The state-run Bangladesh Power Development Board on Monday signed the deal with Power Grid Corporation of India Ltd at a ceremony in Dhaka.

The agreement keeps the provision for Bangladesh to export power to India in the future while PGCIL was tasked to construct, own, operate and maintain a 400-KV double-circuit line to exchange 500-MW power between the two neighbouring countries soon after the system is launched.

"It's (agreement) a small step but a greater thought in regional cooperation through which the South Asian countries will immensely benefit," Bangladesh's Finance Minister Abul Maal Abdul Muhith said after the signing ceremony.

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

Under the deal PGCIL will invest and construct 80 kilometer transmission line and own, operate and maintain it.

The Indian company will recover the construction cost under a fixed rate over 35 years.

"If in future we can export power, the beneficiary or the Indian consumers will share the cost. This is why this agreement is a power exchange deal," BPDB chairman Alamgir Kabir said.

The Indian part of the infrastructure will also include a 400 KV switching station at Baharampur, loop-in and loop-out of Farakka-Jeerat 400 KV single circuit line at the same place, and a 400 KV double circuit line from Baharampur of India running up to Bheramara in Bangladesh.

Bangladesh currently faces electricity deficit of over 1500 to 1800 mw on an average against the de-rated capacity of 4500 mw in 132 state run and private units.

The government recently formulated a vision plan as part of its desperate efforts to augment electricity amid growing demands while the poor power supply is estimated to cost around two per cent in gross domestic product growth each year according a study of the World Bank.

Only around 40 per cent of Bangladesh is currently have access to electricity while the country now witnesses a deficit of 1,000 to 1,500 mw power with 41 public and private sector plants with de-rated capacity of 5,198 mw.