Finance and Power Minister of the Royal Government of Bhutan Namgay Dorji will arrive in Dhaka on October 26 to negotiate and sign a deal to kick off hydro-electricity export to Bangladesh through India.
International Finance Corporation (IFC), an enterprise of the World Bank Group, has already assured Bangladesh of financing regional power trade involving Bangladesh, India, Nepal and Bhutan. However, Bangladesh is now working on a second option because of turbulent political situation in Nepal.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid told the Daily Observer on Monday: "We'll sit with Bhutanese Power Minister Namgay Dorji to discuss the power import issue, which is part of tri-nation (Bangladesh, India and Bhutan) exploration of hydro-electric potentiality in this region."
Bangladesh and Bhutan had earlier tried to venture into a proper mutual sharing of water resources. It is evident that Bhutan is now looking out for its market for exporting electricity after it has started its venture in hydro-power through collaboration with India.
It was only recently that the National Hydroelectric Power Corporation of India entered into an agreement with Bhutan to extend engineering and design consultancy services for the Mangdechhu Hydroelectric Project of Bhutan. India is also behind building the Sankosh river hydro-power complex in Bhutan, which is going to be one of the five tallest dams in the world with 4,000 MW capacities. With such a huge volume of hydro power generation, Bhutan would look forward to exporting electricity to neighbouring India, Bangladesh and Nepal.
In line with this initiative, the government proposed to India to increase capacity of the Indo-Bangla power grid line to 1,000MW from 500MW now for importing electricity from Arunachal Prodesh of India, officials concerned said.
Meanwhile, IFC is also interested to make available sub-national financing to the Power Grid Company of Bangladesh (PGCB) on a corporate finance basis for the proposed cross-border connectivity projects.
Before negotiation with the Bhutanese Minister, Power Division is going to sit today (Tuesday) to take preparation in this regard. However, the State Minister for Power had discussed the issue with the Indian High Commissioner in Dhaka.
"Indian side has okayed the proposal," a senior official of the ministry said.
Bangladesh has already discussed with the Indian counterpart to focus on regional connectivity through sharing potentiality with Nepal and Bhutan during the 7th secretary-level meet in January, 2014. Bangladesh would have focused on sharing hydro-electricity with Nepal and Bhutan but due to the ongoing political situation of Nepal, Power Ministry sits with Bhutan only.
The government has a plan to increase the country's electricity generation capacity to 20,000MW by 2021 and to 40,000MW by 2030. Bangladesh has already installed a 500MW power-grid connection with India.
"India has joint-venture connectivity with Bhutan for facilitating electricity import. Bangladesh's government in a proposal to the Indian side had earlier showed interests to invest in a project at Arunachal Prodesh in India" Nasrul Hamid said, adding: "The entire gamut relating to import of electricity from Bhutan via India will come up in the forthcoming discussion with the Bhutanese minister."
"Power demand in Bangladesh is expected to triple over the next 10 years, so we want to explore all cheaper sources of electricity. Hydro electricity is cheaper and pollution free so we should explore the option," the State Minister added.
The country's lone hydro-power plant in Kaptai, Rangamati, which was commissioned in 1962 with installed capacity of 230 MW, now generates only 180 MW.
Earlier, a Joint Working Group, comprising officials of Bangladesh, India and Bhutan, decided to prepare a framework for hydro-electric joint ventures in Bhutan. Primarily, Bangladesh will provide funds for the projects that will generate electricity for imports by both Bangladesh and India with the latter already drawing power from its funded projects in Bhutan, a senior official of the Power Division said.