India to invest heavily in Bangladesh power sector

India is coming to the rescue of energy strapped Bangladesh.

Sources at Bangladesh’s Ministry of Power, Energy & Mineral Resources said India could invest up to US$9 billion in power generation activities over the next five to six years, or a third of the US$30 billion needed by Bangladesh to surmount its ongoing energy crisis.

NTPC Ltd, the largest Indian state-owned energy service provider and based in New Delhi, signed an agreement this January with the Bangladesh Power Development Board to build the US$1.5 billion Khulna power project with a generating capacity of 1,320 MW. NTPC has also agreed to export 250 MW of power to Bangladesh.

The severe electricity shortage is forcing Bangladesh to embark on capacity addition projects that could total over 5,000 MW. Bangladesh has an installed capacity of over 7,600 MW that is expected to increase to 21,000 MW by 2021.

Bangladesh is looking to participate in the hydro power projects in the Indian states of Arunachal Pradesh, Sikkim and Mizoram. It also intends to build a nuclear power plant with assistance from Russia.

Bangladesh is expected to sign a contract for building two 1,000 MW nuclear power plants by the middle of this year.