Bangladesh’s Summit Reassesses Cross-Border Power Deals After India’s Policy Shift
New Delhi: Bangladesh’s Summit Group is reevaluating its preliminary agreements to import renewable power from India following a recent policy shift by the Indian government. This change allows Indian power generators, which were previously restricted to exporting electricity, to now sell their output domestically. The amendment was made shortly after Bangladesh’s Prime Minister Sheikh Hasina fled the country amid violent protests, enabling Adani Power to connect its Godda coal-fired plant—previously contracted to export all its output—to India’s domestic grid.
Aziz Khan, Chairman of Summit Group, expressed concerns over the potential impact of this policy change on the company’s cross-border power deals. “After the policy change, my partners in India might be more willing to sell in India. Our company will be investing in transmission in Bangladesh, and we will have to assume more risks,” Khan told Reuters. Summit Group, which operates over a dozen fossil fuel-based power plants, had signed preliminary agreements last year with Indian partners, including Tata Power Renewable Energy Ltd, to source 1,000 megawatts of renewable energy.
These agreements are vital for Bangladesh, which relies on fossil fuels for nearly 99% of its electricity. Land scarcity in the densely populated country has limited solar energy expansion, making imports of green power crucial for reducing emissions. However, due to the policy uncertainty, Summit is considering delaying investments and renegotiating financial terms to account for higher risks.
Additionally, Summit’s plans to import clean electricity from 700 megawatts of hydro plants in Bhutan and Nepal are also uncertain, especially after the new Bangladesh government’s suspension of a law that allowed power supply contracts without tenders. Despite these challenges, Khan confirmed that Summit Group remains committed to investing within Bangladesh.
FOLLOW FOR MORE.
