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Power deal with India likely tomorrow

250MW import by 2013

Sharier Khan
During Prime Minister Manmohan Singh's upcoming visit, Bangladesh expects to sign an agreement to import 250megawatt of electricity from India at the lowest possible commercial cost.
The two countries may also sign a memorandum of understanding (MoU) for
mutual cooperation in the renewable energy sector.
Official sources said under the Power Purchase Agreement (PPA), Bangladesh would buy250MW of power from National Thermal Power Company (NTPC) of India at the same rate the Indian company sells to different provinces.
The Cabinet Committee on Economic Affairs yesterday issued an order approving the PPA.
A top Power Development Board official said the PPA would not specify the rate for Bangladesh as the NTPC sells power at different rates from power stations in different India provinces.
The Indian power prices range between Tk 4 and Tk 5.50 per kilowatt hour. In contrast, the PDB's heavily-subsidised bulk power rate is nowTk 2.80 per kilowatt hour. In India it is not subsidised.
With the PPA signed, Bangladesh would try to get electricity from plants in India's eastern region, so that transmission cost remains low. Bangladesh would pay for the transmission from the Indian plant to the border grid substation in Bheramara, according to another agreement signed last year.
The primary design and
construction work for the Bheramara substation and trans-national transmission line is now underway. The PDB says that it would be completed by March 2013 and the Indian power can be imported then.
Besides, an understanding between the two countries allows import of another 250MW later on under a different financial arrangement yet to be fixed.
Official sources said Dhaka was not expecting to sign a joint venture agreement to set up a massive 1,322MW coal-fired power plant in Khulna.
The deal was expected to be signed last year but it has been delayed due to various reasons, including delay in completion of a feasibility study by the NTPC. The NTPC and Bangladesh Power Development Board will jointly set up the $1.5 billion plant that would use imported coal.
Explaining the delay, a top PDB official said Bangladesh has some reservations about some sections of the draft feasibility study that was submitted recently. A Bangladeshi team will go to India in a week to discuss their reservations so that the joint venture agreement could be signed soon.
The PDB has acquired 1,800 acres of land near Mongla to set up the plant. The feasibility report finds the soil condition poor at the site and says this factor would increase the cost of civil engineering.
A group of environmentalists are also opposing setting up the coal-fired plant so close to the Sundarbans mangrove forest. The Department of Environment has, however, given the PDB its clearance on the basis of a primary environmental impact report. The detailed environment study is cur
rentlygoingon.
With the joint venture agreement signed, Bangladesh and India would equally share up to 30 percent equity of this mega project. The remaining equity, which may be equivalent to $1.2 billion, would be taken as bank loan with help of the NTPC.
The ownership of this company would be 50-50. There will be a six-member management committee with three members from India and three from Bangladesh. The managing director and chairman would be represented by the two countries in rotation.
Coal power is considered one of the cheapest in the world, although it is also the worst polluter. This is why Bangladesh intends to build the plant using super-critical technology to keep the level of pollution as low as the current global technology allows.