New Delhi: State-run NTPC Ltd will supply 300 megawatts (MW) to power-starved Bangladesh as part of India’s strategy of playing a key role in creating a new energy security architecture for its neighbours.

Unit NTPC Vidyut Vyapar Nigam Ltd (NVVN) will supply power to Bangladesh Power Development Board, said India’s largest power generation utility in a statement on Tuesday. Of India’s current supplies of 660MW to Bangladesh, NTPC has been supplying 410MW.

India’s playbook ranges from cross-border electricity trade to supplying petroleum products.

“Bangladesh Power Development Board (BPDB) invited tender for supply of 500MW power from India under short term (1st June 2018 to 31st December 2019) and long term (1st January 2020 to 31st May 2033). The bid for this tender was submitted on 11th January 2018 and four bidders namely NVVN, Adani, PTC and Sembcorp submitted their bid. Financial bid was opened on 11th February 2018," the statement said.

This comes against the backdrop of an uncertain outlook for the Indian power sector with the National Democratic Alliance (NDA) government trying to revive electricity demand in the country. NTPC’s projects account for 16% or 51,635MW of India’s installed power generation capacity of 331,117.58MW.

“NTPC Vidyut Vyapar Nigam Ltd, wholly owned subsidiary of NTPC Ltd emerged as successful bidder (L1) both in short term and long term for 300MW power. The supply of power is likely to be commenced from June 2018 after commissioning of 500MW HVDC (high-voltage direct current) inter connection between India and Bangladesh," the statement added without disclosing the price at which the electricity will be supplied.

India, last year, signed two lines of credit worth $5 billion during Bangladesh Prime Minister Sheikh Hasina’s visit to India. During the visit Prime Minister Narendra Modi highlighted energy security as an important dimension of India-Bangladesh ties and promised to add another 500MW under an existing transmission link.

While a spokesperson for Sembcorp India declined comment, Deepak Amitabh, chairman and managing director, PTC India said, “PTC has participated in the bid and it is for BPDB to take a holistic view."

An Adani Group spokesperson didn’t immediately respond to queries emailed on Tuesday afternoon.

The supply of 300MW of power will help NTPC earn Rs900 crore in annual revenue, according to the company. India’s largest power generation utility has been trying to keep pace with the fast-changing power sector wherein the absence of fresh demand for electricity is weighing down the entire power sector.

Fostering cross-border energy trade is an important part of Modi’s South Asia-focused neighbourhood-first policy and has also been articulated in federal think tank NITI Aayog’s draft national energy policy.

India already has power grid links with Bhutan, Nepal and Bangladesh, and is building power projects in the three countries. It also plans to develop power transmission links with Myanmar and Sri Lanka.

India has also been pursuing closer ties in the energy sector with Bangladesh, helping the markets to integrate. State-run Indian Oil Corp. is exploring long-term deals with Bangladeshi companies for supplying liquefied petroleum gas (LPG) and other petroleum products. Also on the drawing board is a plan to set up a large LPG import terminal in partnership with local companies, allowing large vessels to arrive in the Chittagong port.

Road connectivity is another important part of this engagement with India pulling out all the stops to try and expedite the South Asian Sub-Regional Economic Cooperation (SASEC) road connectivity program. SASEC aims to increase economic growth by building cross-border connectivity between India, Bangladesh, Bhutan, Maldives, Nepal, Sri Lanka and Myanmar. India has also been instrumental in the Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement.

Close