Report on economic benefits of electricity trade between Bangladesh and India released
India has contributed a lot to the power sector in Bangladesh, said Dr Gowher Rizvi, international affairs advisor to Prime Minister Sheikh Hasina. He said this at the release of the report “Economic benefits from Bangladesh–India Electricity trade” at Lakeshore Hotel in the capital. Harsh V Shringla, Indian High Commissioner to Bangladesh, Dr Kirit Parikh, chairman of IRADe, Farooq Sobhan, president of the Bangladesh Enterprise Institute, and Dr Kerry Reeves, deputy director of Environment and Economic Growth Office of the United States Agency for International Development, addressed the event.
“At one time, Bangladesh was lagging behind in power, but the situation has changed. In 2010, our power production was 4,000 megawatts, which has increased to 15,000 megawatts at present. In the middle of 2021, we will raise it to 23,000 megawatts,” said Rizvi.
The international affairs advisor also mentioned that this trade result showed the overall progress of the two countries. The future of electricity will be more competitive due to this trade, he asserted. For the first time, a report titled “Economic benefits from Bangladesh-India Electricity trade” was published where India and Bangladesh have identified their infrastructure, such as power and transport, as potential areas to improve economic cooperation between the two countries that would lead to better political relations.
The study was conducted by the South Asia Regional Initiative for Energy Integration (SARI/EI), the United States Agency for International Development (USAID), IRADe and the Bangladesh Enterprise Institute (BEI).
The report summary said during the past few years Bangladesh had the lowest per capita electricity in the South Asia region. The small quantity of electricity import (600 MW) from India, which began in 2013, has given some relief to deal with the acute power shortage that causes economic losses and difficulties in daily life.
“This success will continue for the economic and commercial development of the two countries. We will expand this trade in future,” said the Indian high commissioner.
“Currently, there are many commercial agreements with India that will work to meet the demand for electricity in the two countries,” Shringla added.
Electricity import from India is an economic option for Bangladesh as it is cheaper than all the other options, excluding generation from coal.
The trade scenario needs less domestic power generation capacity and hence less investment not only in power generation capacity,, but also in fuel infrastructure development, which could be diverted to the non-energy sector (agriculture, manufacturing) or for consumption.
Electricity consumption, including the aggregate consumption of households, increases in the TRADE-30 scenario, leading to welfare gain. The gain can be more if a larger import of electricity is permitted. The study shows that electricity imported from India is more economical than any of the other options available (except coal) and brings in substantial socio-macroeconomic and environmental gains.