Bangladesh's Summit Reconsiders Cross-Border Energy Deals Due to India's Rule Alteration

New Delhi: Bangladesh’s Summit Group is reconsidering its agreements to import renewable energy from India in light of a recent policy shift by the Indian government. This new policy allows Indian power generators, which were previously bound by contracts to export electricity exclusively, to now sell their output domestically. The change came shortly after violent protests forced Bangladesh’s Prime Minister Sheikh Hasina to flee the country, and it has already enabled Adani Power to connect its Godda coal-fired plant to India’s national grid, despite prior commitments to export all its electricity.

Aziz Khan, the Chairman of Summit Group, has expressed concern over how this policy shift may affect the company’s ongoing and future cross-border power deals. “With this change, our Indian partners might now prefer to sell electricity domestically. This situation introduces additional risks for our company, particularly as we are investing in transmission infrastructure in Bangladesh,” Khan . Summit Group, which oversees more than a dozen fossil fuel-based power plants, had entered into preliminary agreements with Indian partners last year, including Tata Power Renewable Energy Ltd, to secure 1,000 megawatts of renewable energy.

These cross-border power agreements are crucial for Bangladesh, which currently relies on fossil fuels for nearly 99% of its electricity generation. The country’s dense population and limited land availability have hindered the expansion of solar energy, making the import of renewable power essential for reducing emissions. However, the recent policy changes have introduced uncertainties that could delay investments and necessitate the renegotiation of financial terms to address the increased risks.

Summit Group’s plans to import clean electricity from 700 megawatts of hydroelectric projects in Bhutan and Nepal are also facing uncertainty, particularly following the new Bangladeshi government’s decision to suspend a law that previously allowed the awarding of power supply contracts without the need for tenders. Despite these hurdles, Khan reassured that Summit Group remains dedicated to continuing its investments within Bangladesh, underscoring the company’s commitment to enhancing the country’s energy infrastructure and sustainability goals.