New charges being added to electricity imports from India, cost will increase

Bangladesh’s cost of importing electricity from India is set to rise with the introduction of a new charge for cross-border power trading.

India has initiated a cross-border electricity trading charge of 0.005 Indian rupees per unit, with the fee expected to be added to Bangladesh’s import costs. 

The NTPC Vidyut Vyapar Nigam Ltd (NVVN), an Indian state-owned company, and the Bangladesh Power Development Board (BPDB) are in the process of signing a Settlement Nodal Agency (SNA) agreement to facilitate the arrangement.

The Power Division wrote to the Finance Division on August 18, seeking its opinion on the proposed agreement. Officials concerned have warned that any delay in signing the deal could create complications in importing 1,160 megawatts of electricity into Bangladesh through NVVN.

According to the Power Division, India’s Central Electricity Regulatory Commission (CERC) initially proposed a cross-border electricity trading charge of 0.01 rupees per unit. Following an application by the BPDB, the proposed rate was cut by half to 0.005 rupees per unit.

Bangladesh can import up to 2,656MW from India

Under existing agreements, Bangladesh has the capacity to import up to 2,656MW of electricity from India.

Of this, 250MW is supplied from NTPC plants through NVVN, 300MW from the Damodar Valley Corporation (DVC) and 160MW from the Tripura State Electricity Corporation.

Bangladesh also has agreements to import 200MW from a plant operated by Sembcorp Energy India through PTC India, as well as another 250MW directly from Sembcorp.

The proposed SNA agreement between NVVN and BPDB is intended to cover the combined 1,160MW imported through these sources.