The supply of an additional 500 megawatt (MW) of power from India was supposed to start last month, but officials say the deal is yet to be signed due to complexities over the neighbouring country slapping a 15-percent export duty.
Bangladesh now imports some 660MW power from India.
NTPC Vidyut Vyapar Nigam (NVVN), a wholly-owned subsidiary of India’s biggest power producer, will supply 300MW while Power Trading Corporation (PTC) India Ltd will supply the remaining 200MW.
Bangladesh Power Development Board (BPDB) had said it expected supplies to begin from June as construction of the Bheramara-Bahrampur HDVC interconnection substation’s second unit was completed.
However, the power procurement deal is yet to get the National Board of Revenue’s (NBR) clearance.
“The NBR has raised questions over the duty. We have asked them to follow the procedure used for the existing procurement of 500 MW power from India. We expect a solution will be found soon,” BPDB Chairman Khalid Mahmud told Bangla Tribune.
BPDB officials familiar with the matter said that India imposed a 15-percent export duty on power in late last year. They say, the BPDB has told the NBR that it will pay the duties.
The BPDB had invited tenders for supply of 500MW power from India for short term (Jun 1, 2018 to Dec 31, 2019) and long term (Jan 1, 2020 to May 31, 2033).
NTPC and PTC India emerged as the lowest bidders to win the contracts to supply power to Bangladesh for 15 years.
According to people familiar with the matter, Bangladesh will buy power from NTPC at Tk 4.71 per unit for short term and Tk 6.48 from January 2020 to May 2033.
PTC India will sell at Tk 4.86 per until December next year and at Tk 6.54 from 2020.
Bangladesh’s power generation capacity has grown by two and half times in the last eight years, but the country is yet to bring its entire population under electricity coverage.
With efforts to raise investment, both local and foreign, through setting up more than 100 economic zones, power demand is set to shoot up in the coming years.
To overcome possible shortages in supply, Bangladesh plans to import at least 5,000 MW of power from its four neighbours— India, Nepal, Bhutan and Myanmar by 2040.