Bangladesh is facing an annual transmission charge of Tk120 million under a 35-year agreement linked to electricity imports from India, even as the state-owned Bangladesh Power Development Board (BPDB) considers whether to renew the underlying five-year power purchase agreement.
The agreement, signed during the previous Awami League-led government in 2015, covers the transmission of up to 160MW of electricity from Tripura in north-east India to Bangladesh.
The transmission arrangement runs for 35 years, while the electricity purchase agreement was signed for five years. The Power Division is reviewing the arrangement before deciding whether to extend the electricity supply deal.
A senior BPDB official told Just Energy News that the five-year electricity supply agreement expired in March 2026.
“We have a contract to import 160MW of electricity for five years, which expired last March,” the official said.
Under the existing agreement, Bangladesh pays a tariff of 6.87 Indian rupees per unit for the electricity.
Indian authorities have now proposed supplying the power for a further five years at 9.90 rupees per unit, according to officials familiar with the negotiations. The two sides are expected to negotiate the proposed tariff.
However, the proposed renewal has become more complicated because Bangladesh’s interim government is examining the 35-year transmission arrangement associated with the deal.
“The tariff is expected to be settled through negotiation. But the issue is that the new government wants to examine the unusual 35-year transmission arrangement,” the official said.
The Power Division is therefore seeking a decision from the prime minister on whether Bangladesh should extend the electricity purchase agreement for another five years, officials said.
Officials familiar with the arrangement questioned the rationale for committing to transmission charges for 35 years when the electricity purchase contract itself was initially signed for only five years.
Bangladesh has imported electricity from India for several years under a number of bilateral and commercial agreements. Its existing arrangements provide for imports of up to 2,636MW from Indian sources.
These include 250MW from an NTPC plant through NTPC Vidyut Vyapar Nigam Limited (NVVN), 300MW from Damodar Valley Corporation, 160MW from the Tripura State Electricity Corporation, 200MW from a Sembcorp Energy India plant through PTC India, and a further 250MW from Sembcorp Energy India.
Separately, the BPDB has an agreement to import 1,496MW from Adani Power’s Godda power plant in Jharkhand.
New cross-border electricity charge
Bangladesh is also preparing to pay a separate charge for electricity imported from India under a proposed Settlement Nodal Agency (SNA) arrangement.
The proposed SNA charge is 0.005 Indian rupees per unit. It would be separate from the electricity tariff and would cover services associated with cross-border power transactions, including grid operation, scheduling, metering, energy accounting and settlement.
NVVN and the BPDB have begun the process of signing an SNA agreement. The Power Division wrote to the Finance Division on 18 August as part of the process.
A power-sector official said the SNA charge is already included in Bangladesh’s agreement with Adani Power, meaning a separate SNA agreement would not be required for that supply.
Rising subsidy burden
Bangladesh has estimated that it will require Tk 6445.85 crore in subsidies for imported electricity during the current financial year. The figure represents a significant portion of the government’s total power-sector subsidy allocation of Tk43,904.43 crore.
Energy-sector experts have argued that some of the pressure on the subsidy bill stems from the terms of existing electricity-import agreements.
They said better management of the contracts and more effective negotiations could help Bangladesh secure more favourable terms in future agreements with India.
Despite concerns over contractual arrangements and other losses in the power sector, experts noted that imported electricity can still be cheaper than some forms of domestic generation.
They said properly negotiated cross-border power agreements could benefit both Bangladesh and India, provided the terms are transparent and commercially sustainable.