Bangladesh’s power import costs from India are set to rise with a new 0.005 rupees-per-unit cross-border electricity trading charge, as NVVN and BPDB move toward an SNA agreement covering 1,160MW of imported power amid concerns over delays and increased electricity costs.
Bangladesh’s cost of importing electricity from India is set to increase following the introduction of a new cross-border electricity trading charge, according to officials familiar with the matter. India has initiated a charge of 0.005 Indian rupees per unit for cross-border power trading, with the additional cost expected to be reflected in Bangladesh’s electricity import expenses.
The NTPC Vidyut Vyapar Nigam Ltd (NVVN), an Indian state-owned power trading company, and the Bangladesh Power Development Board (BPDB) are currently working to sign a Settlement Nodal Agency (SNA) agreement to facilitate the settlement of cross-border electricity transactions.
Under existing agreements, Bangladesh has the capacity to import up to 2,656 megawatts (MW) of electricity from India. The power is sourced from several Indian generators and suppliers. Tripura State Electricity Corporation Ltd supplies 160MW, while 250MW is supplied from NTPC plants through NVVN. Another 300MW comes from the Damodar Valley Corporation (DVC).
Bangladesh also has agreements to import 200MW from a Sembcorp Energy India plant through PTC India, along with an additional 250MW directly from Sembcorp. The proposed SNA agreement between NVVN and BPDB is expected to cover a combined 1,160MW of electricity imported through these sources.
The development comes as Bangladesh’s Power Division seeks the Finance Division’s opinion on the proposed agreement. According to sources, the Power Division sent a letter to the Finance Division on August 18, requesting its views on the arrangement.
Officials concerned have warned that any delay in signing the SNA agreement could create complications for Bangladesh’s continued import of 1,160MW of electricity through NVVN. The agreement is therefore considered important for maintaining the settlement mechanism for the imported power.
The cross-border electricity trading charge was initially proposed at 0.01 Indian rupees per unit by India’s Central Electricity Regulatory Commission (CERC). Following an application by the BPDB, the proposed rate was reduced by half to 0.005 rupees per unit.
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Bangladesh currently remains dependent on electricity imports from India to supplement its domestic power supply, with agreements allowing imports of up to 2,656MW. The proposed additional charge is expected to add to the overall cost of these cross-border electricity transactions.
