Bangladesh-India cross-border electricity trade to be delayed further

The Bangladesh-India cross border electricity trade is set to be delayed as the power purchase deal was not inked during the Indian Prime Minister Manmohan Singh’s visit to Bangladesh.

The fund release by ADB, the project financier, also faced a setback as the power purchase agreement between the state-owned power entities of the two neighbouring countries was not signed.

The government of Bangladesh has been eyeing to import 250 megawatts  of electricity from India to meet the country’s mounting electricity demand.

Initially the Indian electricity was scheduled to enter into Bangladesh grid by 2012. The power ministry, however, said in early this year that the procedural delay may defer the power import from India until 2013.

But with the delay in signing the PPA, the planned electricity import may be delayed further, said an energy ministry official.

However, Bangladesh Power Secretary Abul Kalam Azad said the import of electricity from India will not be hampered with the delay in signing the PPA.

“We are still checking the pros and cons of the draft PPA before signing the deal finally,” Azad said.

He expressed the hope that the PPA will be signed within the next one month and the ADB will start releasing its promised fund subsequently.

“We already contracted out the jobs to develop necessary infrastructure including setting up of electricity transmission lines and power sub-stations to two foreign firms,” he said.

The government is paying the contractors-- German Siemens and Spanish Cobra -- in advance to carry out their works, he said.

Officials said The ADB was expected to initiate disbursing fund from March, 2011, to install a sub-station and overhead transmission lines to facilitate import of 250 mw electricity.

The Manila-based multilateral donor agency is delaying the disbursement of its committed fund for implementation of the project as power purchase deal was not signed yet. The ADB is yet to release even the first installment of the project loan due to that reason.