Dhaka set to sign 250MW power purchase deal in Feb
Manjurul Ahsan
Bangladesh is likely to sign an agreement with India in February to buy and import 250 megawatts of power from the latter in line with the January 2010 memorandum of understanding inked by the prime ministers of the two South Asian neighbours for power trade and installation of power plants in Bangladesh.
The Bangladesh Power Development Board has agreed to the power purchase rate set by the Central Electricity Regulatory Commission of India, although earlier the BPDB had demanded that the Indian National Thermal Power Corporation should set the price and the plant from which Bangladesh would procure and bring the power in.
A Power Division official told New Age on Monday that they hoped the deal would be signed in the next meeting of the Indo-Bangla joint steering committee on power business issues slated for February 20 to 21.
The official said, ‘In a meeting on Sunday afternoon with the visiting Indian delegation led by power secretary P Uma Shankar, the Bangladesh side proposed that the PPA should be signed immediately. In response, Shankar assured the Bangladesh team that the deal would certainly be sealed in the next meeting of the joint steering committee.’
The progress in purchase of importing 250MW power from India had been facing
a stalemate since Dhaka’s demand that the power price should be specified in the PPA and as New Delhi had remained rigid on its stance that the CERC was the sole authority for setting the electricity price.
Earlier on Sunday, the BPDB and the NTPC signed a deal to form a joint-venture company for setting up a 1,320MW coal-fired power plant at Rampal upazila of Bagerhat district.
In a media briefing following the Sunday’s BPDC-NTPC agreement signing ceremony, Indian power secretary Uma Shankar reiterated that there was no scope for any other authority except the CERC to set the power price. ‘We are bound by the law. The CERC sets the power prices for different provinces of India and will do the same in case of power sales to Bangladesh,’ he explained.
The CERC sets power prices considering the generation costs of different power plants.
Agreeing with the proposition, Bangladesh representatives in Sunday’s meeting reportedly sought power from the plants having the least generation cost.
Shankar said he would sincerely try to arrange the deal as requested by the Bangladesh team, the Power Division official said.
When asked about the possible power price, the Indian secretary said it would range between Tk 4 and Tk 4.50 a kilowatt-hour (unit). ‘It might even be less than Tk 4 a unit,’ he added.
Apart from the price, for each unit of power the BPDB will have to pay Tk 0.04 in commission to the Vidyut Vyapar Nigam Ltd, a subsidiary of the NTPC, Tk 0.20 in wheeling charges to the Power Grid Corporation of India, and Tk 0.23 in wheeling charges to the Power Grid Company of Bangladesh.
The Asian Development Bank, which had agreed to finance the infrastructure development in Bangladesh for implementing the power trade and power plant installation, is yet to disburse the funds as the two countries concerned are yet to close a PPA.
The Power Grid Company of Bangladesh, however, has started setting up a $107 million power substation by its own funds at Bheramara in Kushtia and a $15 million power transmission line from India’s Baharampur to the substation so that it can add 250MW power to the national grid by 2012.
But India has not even acquired the land required for infrastructure development for implementation of the project in its side.
Bangladesh prime minister Sheikh Hasina and her Indian counterpart Manmohan Singh in January 2010 in New Delhi signed an MoU on initiating power trade between the two countries, which, they agreed, would begin with Bangladesh importing 250mw of power from India and setting up power plants in its territory.
In addition, Bangladesh will also buy and import 250MW of power from the Indian open market.
The BPDB on Sunday sent a financial proposal to the World Bank, which has committed to fund the project.
Earlier this month, the board also sent a proposal to India through the foreign ministry for appointing an Indian agency to manage power purchase from the country’s open power market.
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