Bangladesh to import electricity from India

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Bangladesh will import up to 1,200 megawatts (MW) of electricity from India by the middle of 2012 to meet its fast growing demand for power, a senior government official said on Wednesday.

"There will be an umbrella agreement under which we will import electricity from India," said A.S.M. Alamgir Kabir, chairman of the state-run Power Development Board (PDB).

"A deal in this regard will be signed during Prime Minister Sheikh Hasina's visit to India next month," he told Reuters in an interview.

Hasina was due to make her first visit to New Delhi since taking office as prime minister for a second time in January later this month but has postponed the trip until middle of January, officials said.

The date for the visit has yet to be finalised, they said.

Initially Bangladesh will buy 500 MW of electricity across the border at an estimated cost of nearly $200 million, and then gradually increase it up to 1,200 MW over three years, Alamgir said.

Bangladesh's state-managed Power Grid Company and Indian state-run Power Grid Corporation will jointly set up transmission lines to carry the power to the Bangladeshi grid.

Both the countries have agreed to bear the inter-connection costs in their respective territories. India also offered to provide soft loans to Bangladesh to set up its connecting grid, the PDB chairman added.

The World Bank has also shown willingness to fund the connecting grid, the first ever between the two neighbours, Alamgir said.

Bangladesh produces around 3,700 MW of electricity on average daily against the peak hour demand for over 5,500 MW, officials said, adding that electricity demand has been growing by 7.50 percent annually since 1990.

Around 40 percent of Bangladesh's 150 million population has access to electricity, one of the lowest levels in the world.

Augmenting electricity generation is a key priority of Hasina's government which committed to generate 5,000 MW by 2011, and 7,000 MW by 2013.

"That will require an investment of $7 billion," Alamgir said.

"But it should not be difficult for us as the private sector and development partners including World Bank and Asian Development Bank desired to play the major role while the government plays the role of the catalyst."