Govt to pay $1.76bn for power import from India in FY24

The government is slated to allocate $1.76 billion for the import of 2200MW-2656MW of electricity from India during fiscal year 2023-24 through a combination of public and private initiatives.   

Bangladesh Power Development Board (BPDB), a state-owned entity, has communicated the anticipated financial requirement to the Power Division to ensure a steady supply of power from India.

The import of electricity is part of Bangladesh's efforts to secure its energy needs.

A senior official disclosed that BPDB currently imports electricity from six different sources under a public-private partnership with India.

The official also confirmed that BPDB has an existing arrear of $475 million in unpaid electricity bills.

The lion's share of the payment, amounting to $1.10 billion, will be directed to Adani's 1496MW power plant in Jharkhand, India. This import is predicated on a 65 percent plant factor and an assumed coal price of $162 per metric tonne.

Furthermore, BPDB is set to procure 510MW of electricity from Indian state-owned NTPC Viddut Vyper Nigam Limited through three different agreements totaling $340.34 million. Additionally, 200MW will be purchased from PTC India Ltd at $135.58 million, and 250MW from Sembcrop Energy India Limited in the upcoming fiscal year.

BPDB is also obligated to remit $17.34 million in wheeling charges to facilitate the transfer of electricity through Indian grid lines. The payments will be processed via HSBC, Bangladesh Krishi Bank, Sonali Bank Ltd, and Rupali Bank Ltd. BPDB could also incur penalties for the delayed settlement of $475 million in bills from the current fiscal year.

In light of these developments, the Bangladesh Independent Power Producers Association (BIPPA) has appealed to the government to impose import duties on electricity imports, akin to those on local power producers. The Association argues that electricity imports have an undue advantage due to lower costs compared to local power generation.

The Power Division has submitted a proposal requesting an allocation of $5.921 billion for the 2023-24 fiscal year, aimed at guaranteeing an uninterrupted electricity supply.

This substantial budget will be allocated for various expenditures, including the acquisition of electricity from Rental, Quick Rental, and Independent Power Producers (IPPs), electricity imports from India, power from 1000 diesel-based plants, repayment of Export Credit Agency (ECA) funded projects, and payments for long-term service agreement (LTSA) based power plants in the public sector.