The line between India and Bangladesh could be the precursor to a South Asia electricity grid that is expected to link India, Bhutan, Nepal, Bangladesh, Sri Lanka and Pakistan by 2020, with preliminary talks between India and Sri Lanka power cooperation just concluded.
According to foreign secretary Sujatha Singh, the inauguration is a very big event and we see this as a milestone in our cooperation with Bangladesh.
While diplomatic gains from the power project may not be substantial, it will help New Delhi gain some traction with Sheikh Hasina who faces elections next January. India could earn $350 million a year from the exports, said officials.
NTPCs power trading arm, NTPC Vidyut Vyapar Nigam (NVVN), has been designated as the nodal agency for cross-border trading of power with Bangladesh. NVVN has signed a power-purchase agreement with the Bangladesh Power Development Board for supply of 250 MW power from NTPCs stations for 25 years from the unallocated quota of the government. Supply of power will start on commercial operation of the HVDC link being set up for the purpose, which is expected to be operational in October 2013, officials told FE.
New Delhi is making efforts to offset some of the criticism leveled at it for diverting water from the Teesta river, which flows from West Bengal into Bangladesh, where it feeds a large irrigation network, said diplomatic sources.
The 25-year government-to-government deal between NVVN and Bangladesh Power Development Board involves providing 250 mw of electricity from Indias eastern grid to Western Bangladesh. Final testing is under way.
The Bangladesh utility will be charged CERC-approved tariff for concerned NTPC plant. A commercial agreement for an additional 250 mw by the end of this year will be finalised once bids from Indian suppliers have been assessed, and there are plans to increase the electricity transmitted to 1,000 mw within five years. During Hasinas visit to New Delhi in 2010, the two countries had signed an MoU for supply of 500 Mw of power to Bangladesh.
It was also decided to set up substations with a high-voltage direct current link. Substations on both sides of the border at Nabagram, Murshidabad, in India, and Bheramara in Bangladesh are now completed.