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Good electricity import price set

Dhaka, Delhi sign deal; price fixed at around Tk 4.66/ unit; supply to start by June next year

Pallab Bhattacharya, New Delhi
Bangladesh will start receiving 250 megawatts of electricity from India by June next year at a reasonable price under a purchase agreement signed in New Delhi yesterday.
The agreement was signed between Power Development Board of Bangladesh and National Vidyut Vikas Nigam at the Oberoi Hotel during a meet-
ing of the Joint Steering Committee, headed by the power secretaries of the two countries.
The power from India will travel through an inter-connected grid, Bangladesh Power Secretary Abul Kalam Azad told journalists in the Indian capital.
He said Bangladesh would be getting the electricity for Rs 2.8o per unit, which is about Tk4 per unit. However, according to yesterday's currency rates, Rs 2.80 is aboutTk4.66.
Meanwhile, PDB officials in Dhaka said a maintenance charge of Tk 0.20 per unit could be added to the electricity price fixed. A PDB high official said the authorities expected that the price would be underTk 5 per unit through negotiation and that the price fixed was within expectations.
Zaid Bakht, research director of Bangladesh Institute of Development Studies, said the rate is at par with the rate in which India sells electricity in its local market. However, Bangladesh will have to pay in foreign currency, which will mount pressure on its foreign exchange reserves, he said.
Yesterday, Azad said both sides at the meeting expressed satisfaction at the pace of work in Bangladesh and India for the completion of the transmission line connecting the power grids of the two countries.
The 250MW of electricity will be transmitted to Bangladesh through the Baharampur (India)-Bheramara (Bangladesh) grid, he said.
Yesterday's signing of the agreement is a follow-up to the joint communique issued at the end of Bangladesh Prime Minister Sheikh Hasina's visit to India in January 2010.
The power will be sourced from the 10 percent unallocated quota of a number of India's state-owned power plants. Each Indian plant has 10 percent electricity that remains unallocated, said the Bangladesh power secretary.
He said both sides explored the possibility of purchasing power from the Farakka plant but the cost per unit turned out to be on the high side at Rs 3.80 per unit (around Tk 6.32 as of yesterday) and "Bangladesh was looking for electricity at lowcost".
Azad said Bangladesh would also float a tender for buying an additional 250MW of power at market rate from India as a followup to the joint communique.
He said the Joint Steering Committee meeting, which was preceded by a meeting of the India-Bangladesh Joint Working Group on power sector cooperation on Monday, also agreed to form a joint venture company next month for the 1,320MW coal-fired power plant at Ramban in Bagerhat. An MoU in this connection was signed between PDB and India's state-owned National Thermal Power Corporation in Dhaka last month.
According to Azad, both sides agreed to hold the first meeting of the Board of Directors of the newly-incorporated company Bangladesh-India Maitree Bidyut Kendra next month when land development work for the proposed plant is expected to begin.
Replying to a question, Azad dispelled apprehensions about the environmental impact of the plant. He pointed out that as per environmental norms no power plant should be set up within 12km of the Sundarbans buffer zone. The proposed project is 14km away from the Sundarbans, he said.
He cited more reasons as to why the environment would not be affected by the proposed Ramban plant. Firstly, the direction of the wind at the plant site is south east to north west in the summer and the reverse in the winter, which clearly means that ash contents of the plant will not be carried towards the Sundarbans, he claimed.
Secondly, the proposed power plant will use imported high-grade coal in which the ash content is just 0.2 percent.
Thirdly, the plant will have in place an environment mitigation plan.
The power secretary said India had also agreed in principle with Bangladesh's proposal for jointly developing the immense hydro power potentials of the north-eastern Indian states, including Nagaland, Mizoram and Manipur, sourcing electricity from the first unit of Palatana power project in Tripura and acquiring a stake in the project's second unit.
The Joint Steering Committee meeting decided to set up a six-member technical team comprising three members each from Bangladesh and India to study the possibility of joint powerprojects in the north-eastern Indian states and also buying power from the first unit of Palatana gasbased power plant in THpura, Azad said
Tripura Chief Minister Manik Sarkar had declared during Hasina's visit to the state in January this year that his government was willing to give to Bangladesh 100MW from Palatana project.
The team will also study all the proposals for joint development of power projects in north-eastern India and submit its report in three months, Azad said.
Answering another question, Azad said Bangladesh would have to invest about $1.2 billion to acquire a stake in the second unit of Palatana power project.
In another important development, Azad said India has informally given its green signal to allow export of electricity from Nepal to Bangladesh via the Indian power grid.
The Indian side asked the Bangladeshi team to begin talks with Nepal for import of power from the Himalayan nation.
Azad said Bangladesh had already informally asked Nepal about power purchase but no formal proposal could be mooted in the absence of a green signal from India. Now that the signal is 'available', "We will soon approach Nepal to expedite formal talks on importing electricity from Nepal."
While Azad led the Bangladesh delegation at the Joint Steering Committee meeting yesterday, the Indian delegation was headed by its Power Secretary P Umashankar.