Ever since Bangladesh gained independence in 1971, it has held strategic significance in the south block of Raisina Hills. India emerged as a reliable partner for Bangladesh, and this has been a major boon for the country. Due to its geography, surrounded by India on three sides and the Bay of Bengal on the fourth, Bangladesh has been vulnerable. However, thanks to India’s perspective in the region, Bangladesh enjoys neighborly privileges and has nothing to worry about. This is probably why, despite having bilateral relations with countries across the world, Bangladesh remains reluctant to trust anyone as much as it trusts India.
Indo-Bangladesh Friendship Pipeline inaugurated
On March 18, Prime Minister Narendra Modi and Bangladesh Prime Minister, Sheikh Hasina, jointly inaugurated the 131.5-kilometer-long India-Bangladesh Friendship Pipeline (IBFPL) from Siliguri in the northern part of Bengal to Parbatipur in Dinajpur province of Bangladesh. The pipeline project was signed in 2018.
The pipeline, built with Rs 377 crore drawn from a line of credit offered by India to Bangladesh, will carry one million metric tons of high-speed diesel from the Numaligarh refinery in Assam to Bangladesh Petroleum Corporation’s Parbatipur depot.
The pipeline will prove crucial in meeting Bangladesh’s burgeoning energy needs and mark a milestone in Indo-Bangla ties. Bangladesh Information and Broadcasting Minister Hasan Mahmud said, “Bangladesh’s rapid development is fueling its hunger for more power. “We are very pleased that India is meeting this demand not only through this pipeline, but also through other projects such as the Maitree Super Thermal Power Plant and power supply from the Godda thermal power plant in Jharkhand,” said the statement.
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Bangladesh’s energy needs
Bangladesh is currently confronting a significant energy crisis, which poses a threat to its economic growth. The occurrence of prolonged power outages is frequent, even in the capital city of Dhaka, and as a result, production in critical export sectors, particularly the ready-made garments industry, responsible for around 85% of the country’s exports, has been hindered.
Last year, in early October, Bangladesh experienced a grid failure that left nearly 80% of the country without electricity. The frequent power outages have caused a decline in production, with numerous industrial units in Bangladesh reporting a drop of up to 50% in output, thus negatively impacting the country’s export earnings.
The Russia-Ukraine conflict and its consequences
Bangladesh, a country with an energy deficit, has been grappling with an energy crisis that was exacerbated by the conflict between Russia and Ukraine, which led to a significant surge in oil and gas prices. As a result, Bangladesh had to halt its gas procurement and shut down numerous power plants that ran on diesel.
“This pipeline will result in quick transport of diesel into Bangladesh and will do away with our reliance on importing the petroleum product in oil tankers by road and rail from India that take a long time and are subject to procedural delays at times.”
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Maitree Super Thermal Power Plant
In addition to this initiative that will assist in fulfilling Bangladesh’s energy requirements, the initial phase of the Maitree Super Thermal Power Plant, valued at $2 billion and located in Rampal in Khulna province, is already providing 660 MW of electricity to the national grid of the country.
Under a concessional financing arrangement provided by India to Bangladesh, the Maitree project, which has a capacity of 1320 MW, is currently under construction. The two nations established the Bangladesh India Friendship Power Company Limited (BIFPCL), which is a joint venture between India’s National Thermal Power Corporation and Bangladesh Power Development Board with a 50:50 stake.
Upon its completion, this power plant will become the largest in Bangladesh. In September last year, during the visit of Bangladesh Prime Minister Sheikh Hasina to New Delhi, Indian Prime Minister Modi and Sheikh Hasina jointly inaugurated the first unit of the power plant.
More power promised
Bangladesh is also eagerly anticipating power supply from Adani Group’s 1600-megawatt thermal power station located in Godda, Jharkhand. The Energy Advisor to Prime Minister Sheikh Hasina, Tawfiq-e-Elahi Chowdhury, stated last month that Bangladesh aims to import a minimum of 600 MW of electricity from this facility to fulfill its high summer demand.
The initial phase of the power plant has already been synchronized with Bangladesh’s power grid, and following the completion of some procedures and final negotiations between the two nations, the export of electricity to Bangladesh from the facility is expected to begin in the coming weeks.
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According to the Power Minister of Bangladesh, Nasrul Hamid, his country intends to increase its energy imports from India. Discussions are currently underway between the two nations, exploring all potential avenues. The Maitree power plant is just the start of such collaborations, and Bangladesh hopes to pursue further joint ventures. India has already played a significant role in assisting Bangladesh in meeting its escalating energy requirements, and it is anticipated that India’s role will expand exponentially in the near future.
Chine out, India-US in
India’s assistance to Bangladesh in fulfilling its energy requirements is intended to mitigate the latter’s reliance on China, whose investments in Bangladesh’s energy sector have reached $8.31 billion. Although Beijing has offered to support Bangladesh’s shift toward renewable energy sources, Dhaka is hesitant to accept loans from China for the construction of power plants due to concerns over China’s lending policies that can lead countries into debt. Bangladesh’s finance minister, Mustafa Kamal, previously cautioned against these policies, pointing to Sri Lanka’s current severe financial crisis as an example.
In addition to aiding Bangladesh in meeting its energy requirements through projects like the Maitree Super Thermal Power Production and supporting the country in accessing renewable energy sources from Bhutan and Nepal, India has urged the United States to increase its energy cooperation with Bangladesh in the renewables sector. The US Presidential envoy on climate change, John Kerry, offered assistance to Bangladesh in enhancing its power grid and transitioning to clean energy.
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Eye to expand BBIN
India has also proposed expanding power trade within the BBIN framework, and discussions facilitated by New Delhi are presently ongoing. Furthermore, India has pledged to export power generated from its hydropower projects in Sikkim and Arunachal Pradesh to Bangladesh once these are completed. The India-Bangladesh Friendship Pipeline is thus an important step in India’s efforts to help Bangladesh address its energy crisis and also part of New Delhi’s strategy to counter China’s influence in the region.
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