New deal to run till 2026
The government on Sunday again renewed a five-year contract with India to purchase 160MW of electricity, despite Bangladesh having sufficient electricity production to meet domestic demand.
Officials said the deal was continued as it is extremely cost effective.
The proposal was approved at a meeting of the Cabinet Committee on Public Procurement chaired by Finance Minister AHM Mustafa Kamal.
According to the new contract, the timeline for importing electricity from Tripura, India has been extended for another five years till 2026. At the same time, the amount of electricity imported has been increased from 100MW to 160MW.
After the meeting, an additional secretary of the cabinet department told media the government will save Tk706 crore by importing electricity under the contract.
According to the officials, a five-year contract was signed to import electricity from NTPC Vidyut Vyapar Nigam Limited (NVVN) in India on March 9, 2016. The agreement expired on March 16 this year.
According to a report of Economic Times, the Government of Tripura had approached the central government of India to take necessary initiatives to increase electricity exports to Bangladesh to 160MW in January this year.
According to Economic times, a Tripura government official said: “Last year, we supplied 40MW to Nepal. However, the contract was not renewed as the neighbouring country did not show any keenness to renew it.”
Secretary of the Power Division of Bangladesh Md Habibur Rahman told this newspaper on Sunday evening that the renewal of the contract with India had nothing to do with India’s agreement with Nepal
“This new contract with Tripura will benefit Bangladesh. We have purchased electricity this time at a lower price than the previous contract, after hard negotiation for four months. I think India would be happy if they had to cancel this contract,” he added.
According to the new contract, Bangladesh will purchase electricity from India at Tk7.14 per kilowatt hour. From June 16, 2017, till March 17 this year, Bangladesh had to pay Tk4,188.78 crore.
According to the Energy division, Bangladesh had produced 12,829MW of electricity against demand for 12,294MW this year till Sunday.
Officials also said India is a good source of backup of electricity in Bangladesh. The government does not want to stop this backup right now.
The price of coal and gas was rising in the international market, and this may affect Bangladesh’s power production, they added.
Power Division Secretary Md Habibur Rahman said: “When we made the first contract with Tripura for electricity, we made a transmission line for 35 years. If we stop purchasing power from India now, we still have to give Tk80 lakh to India per month for that transmission line for the next 30 years.
“In addition, there is a provision in our power master plan to import 15% of our power. Importing power has a lot of advantages in terms of the local environment and fuel cost issues,” he added.