Finance Minister AMA Muhith Wednesday said that the power purchase agreement (PPA) to import electricity from India will be signed in September next.
State owned Bangladesh Power Development Board (BPDB) will sign the PPA with Indian NTPC Vidyut Vyapar Nigam (NVVN) to import initially around 250 megawatt (mw) of electricity to ease the country's nagging electricity crisis. The cabinet committee on economic affairs chaired by the finance minister, however, did not approve signing of the PPA Wednesday.
"We have sent it back to re-examine some clauses of the draft PPA," Muhith told newsmen after the meeting. He said the termination clause of the PPA needs to be revised. As per the draft PPA, the duration for import of 250 mw electricity from Indian open market will be 25 years after signing of the agreement.
"But we may not have requirement of electricity import for long 25 years," said the finance minister. The draft deal has also provision for Bangladesh to export power to India too, if required in future. Electricity tariff would be fixed as per the Indian central energy regulatory commission.
Currently a single unit electricity cost in India is between Indian rupee 2.8789 and 2.9426 from Kahalgoan and Farakka plants respectively. Transmission charge and loss of electricity will be added with the costs.
A memorandum of understanding (MoU) over import of electricity from India was signed between Bangladesh and India during Prime Minister Sheikh Hasina's visit to Delhi in January, 2010. The non-signing of the PPA is, however, delaying disbursement of loan by project financier Asian Development Bank (ADB).
Bangladesh has already contracted out the task of installing overhead transmission line and setting up a power sub-station to Spanish Cobra and German Siemens respectively. Under the contract, Siemens is to build the sub-station under a project worth $107 million and Cobra Instalaciones Y Servicios SA is assigned with the task of laying the electricity transmission line for the project at a cost of around $15 million.
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