A small 150mw cross-country power trade in South Asia can generate 1.5 lakh domestic employment, an economist told a roundtable in Dhaka yesterday.

Presenting a paper at the roundtable, Professor Abul Barakat said electricity trade in the region will also attract more foreign direct investment (FDI), reduce trade gaps between countries, save foreign currency and enhance educational and health status significantly.

The roundtable on 'Economic and Social benefits of Power Trade in South Asia Growth Quadrangle Region' was jointly organised by South Asia Regional Energy Coalition (Sarec), USAID, Dhaka Chamber of Commerce and Industry (DCCI) and American Chamber of Commerce in Bangladesh (AmCham) at the DCCI auditorium.

Energy experts, analysts and business leaders at the discussion suggested greater regional cooperation, accelerated private-public partnership and electricity trade to foster socio-economic development in this region.

"Rural electrification programme has created a huge market for electrical appliances, increased the higher rate of electricity-powered irrigation than diesel, resulting in higher and intense cropping yield and standard of living," Prof Barakat said.

He said expansion of access to electricity of households, social institutions and economic sectors is a must to accelerate economic growth and human development.

Barakat said only 33 percent people in the country have access to electricity, while the coverage is only 22 percent in rural areas. The current shortage of electricity is 500MW.

He listed low access and availability, poor quality and financial performance, system loss and capacity constraints of power generation, transmission and distribution that created huge fiscal burden and constrained expansion of growing demand for electricity.

Surplus hydropower in wet season in Nepal and Bhutan coincides with seasonal peak of supply shortage in Bangladesh, especially

in the western and northern regions, he noted.

Citing his own study on 350 villages, the economist said the poor are benefited more from the access to electricity than those of the rich.

Professor Mahendra P Lama, a renowned economist from India, stressed sub-regional interconnections of power grids and termed the unavailability of electricity as the main impediment to the development and growth in South Asia.

Through sub-regional interconnections, the rate of GDP of Bangladesh could be enhanced by 1.3 to 2 percentage points in short term, while 1.5 to 4.2 percentage points in Nepal, Lama pointed out.

"Power exchanges will immensely change the export baskets resulting a boost in production of diversified products, higher trading and exports," he added.

Relocation of industries from cities to rural areas will change the rural scenario by enhancing infrastructure and communication that will help reduce the urban-rural gap, P Lama, a professor of Jawharlal Nehru University, Delhi, attributed.

In his study, Lama showed that each 10 MW power project creates about 1,200 unskilled jobs for about three years of construction period.

Responding to a question that India has not been cordial in multilateral deals on water and energy issues, Lama said it is a matter of mindset. He however said these issues need to be dealt incorporating civil society, donor agencies and the media.

Cross-border power trading will help the country in building foreign exchange reserves and reduce political instability and tension, Amcham President Aftab ul Islam said.

"It will not only increase economic growth, but also establish new relationship among various ethnic groups, social integration, and women empowerment," he observed.

DCCI President Sayeeful Islam, stressing private sector involvement in the power trade, said a pilot project in a small scale could be undertaken before regional grid connection.