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Business Insider Bangladesh

Cost of importing electricity from India to stand at Tk20, 000cr in current FY

Ismail Ali || BusinessInsider

Published: 12:57, 15 May 2024   Update: 00:33, 16 May 2024
Cost of importing electricity from India to stand at Tk20, 000cr in current FY

Photo: Collected

Bangladesh is projected to spend Tk 20,000 crore on importing electricity from India in the current financial year, according to the Power Development Board (PDB).

However, the import costs of the electricity will increase by 117 percent and the cost will increase mainly due to the increase in the dollar exchange rate and higher electricity prices of Indian Adani Group.

According to a report of the organisation, in the first six months (July-December) of the current financial year, around 836.60 crore units (kilowatt hours) of electricity were imported from India around Tk 9,030.80 crore were spent for this.

At the end of the current financial year, the electricity import increased to 1,628.68 crore units.

It may cost around $1.80 billion or Tk19, 966.72 crore. According to this, the average import price of electricity per unit will be Tk 12. 26.

In the fiscal year 2022-23, around 1,51,54,68,000 kilowatt hours of electricity were imported from India with Tk 9, 223.41 crore. The average import cost per unit stood at Tk 8.77.

The electricity import from India increased by 36.35 percent and import cost increased by 97.37 percent in the last fiscal year.

Meanwhile, around 764.44 crore kilowatt hours of electricity was imported from India with Tk 4,673.21 crore and the import cost per unit was Tk 6.11.

Bangladesh has signed an agreement to purchase 250 and 300 MW of electricity in two phases from NVVN, a subsidiary of the Indian state-owned company NTPC. The duration of the two agreements is 25 years.

Moreover, 250 MW of electricity is sourced from Sembcorp India, with an additional 200 MW from PTC and another 160 MW from NVVN Tripura. Both Sembcorp and PTC contracts have been renewed for 15 years, while Tripura contracts are renewed every five years.

In 2014, Bangladesh started importing 250 MW of electricity from NVVN for the first time on a G2G basis. The contract will expire in 2039.

And the remaining 300 MW of NVVN, 200 MW of PTC and 250 MW of Sembcorp were signed in 2018. These three agreements will expire in 2033.

And, NVVN signed an agreement to import 160 MW of electricity from Tripura in 2016. The five-year contract expired in 2021 and the contract has also been renewed for another five years.

On the other hand, 1,496 MW of electricity is being imported from Adani Power's Godda plant in Jharkhand, India. Electricity will be imported from this center for 25 years. The term of the agreement will end in 2048.

In the previous fiscal year, the center incurred a capacity charge of Tk 632.57 crore for one unit. However, in the current fiscal year, the capacity charge is expected to reach approximately Tk 5,500 crore or $47.62 billion, covering the full capacity charge to the Adani Group.

While talking to the reporter, a high official of the PDB on condition of anonymity, said Adani’s power plant is coal-fired.

And other power centres in India are gas-operated. Adani's power purchase cost has gone up mainly due to the impact of coal prices. Meanwhile, the price of the dollar has increased abnormally. This will further increase the cost of imports in the current financial year.

Source: Share Bize