Electricity trade between India-Bangladesh to continue amid other curbs

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Despite fraying India-Bangladesh trade ties, electricity continues to dominate Bangladesh’s imports from India.

“India’s biggest electricity export market currently is Bangladesh. There is not going to be any change in the electricity supplied to the nation as these are bound by long-term power purchase agreements. However, the supply is curbed only when there are repeated payment defaults from Dhaka to India,” said a senior government official requesting anonymity.

Energy deficient Bangladesh significantly relies on India for supplying electricity to its citizens. At least 2.5 gigawatt (GW) is exported to Bangladesh from five Indian power companies – Adani Power, NTPC, SEIL Energy India, PTC and Powergrid Corporation of India Ltd.

Data from the ministry of power seen by Moneycontrol showed that until May 19, India exported at least 2.4 GW to Bangladesh on a daily basis. Adani Power’s imported coal based thermal power plant in Godda, Jharkhand alone is supplying at least 60 percent (1.42 GW) of the total 2.4 GW.

Bangladesh has struggled to pay its dues amid the domestic political turmoil last August that led to the ouster of the country's prime minister. Adani Power chief financial officer (CFO) Dilip Jha during an earnings call on May 1 said the company is still awaiting payments amounting to $900 million from Dhaka.

“Bangladesh has paid nearly $1.2 billion of the roughly $2 billion totally billed to the country. We are hopeful that not only will we continue to receive payments equivalent to the current month's billing, but that the old outstanding dues will also be liquidated,” Jha said adding that the company is supplying full power to the neighbouring country.

Indian grid for Nepal-Bangladesh power trade

Bangladesh uses India’s national grid to import electricity from Nepal as well. This was allowed by India from November last year.

Bangladesh imported electricity from Nepal through the Indian power grid for the first time on November 15, 2024, marking the operationalisation of a tripartite arrangement that was in the works for almost two years and is meant to forge energy connectivity.

The tripartite power sales agreement was signed in Kathmandu on October 3, 2024 between India’s NTPC Vidyut Vyapar Nigam, Nepal Electricity Authority and the Bangladesh Power Development Board. Such a tripartite power trade arrangement is a first of its kind in South Asia.