Delhi seeks quick approval for power grid project | 2018-01-16 |

Third Indian LoC

Delhi seeks quick approval for power grid project

Shamim Jahangir     16 January, 2018 12:00 AM printer

Delhi seeks quick approval for power grid project

India has sought quick approval for a cross-border power transmission project under the Indian third Line of Credit (LoC).

The Bangladesh portion of the proposed power grid will stretch across 200 kilometres.

The 765KV inter-connection transmission network will connect India’s Katihar in Bihar and Barnagar of Assam through Parbatipur in Bangladesh.

“Bangladesh will have to spend $395 million on the power transmission project out of the total project cost of $700 million,” an official of Power Grid Company of Bangladesh (PGCB) told the daily sun.

Dhaka is expected to get 2000MW of electricity through the mega power transmission facility.  “We are hopeful that the project will get approval at the joint steering committee meeting to be held on January 31 in Delhi,” he said.

Besides, three other Development and Production Plans (DPPs) in power sector have so far been approved under the third LoC.

Indian high commissioner Harsh Vardhan Shringla met with State Minister for Power and Energy Nasrul Hamid last Sunday and requested for speedy approval of Indian-supported projects, reliable sources said.   

The projects are: Infrastructure development for power evacuation facilities of Rooppur Nuclear Power Plant, Mollahat 100MW solar PV power Plant and Installation of one Lakh LED street lights in Dhaka, Chittagong and Rajshahi by Energy Efficiency Service Limited (EESL) of India.

“We have so far received three major projects for construction of evacuation line under 2nd and 3rd LoC at a cost of $2.5 billion,” an official said.

He added that India has pledged to support $1.6 billion for the projects.

In October 2017, the government signed the $4.5 billion third Line of Credit (LOC) agreement with India. The new LoC will be used to implement 17 major projects in Bangladesh, most of which are for infrastructural development.   

Bangladesh has two other LoC open with India: the first one was signed in 2010, and the second one in 2016.

But most of the projects under the first and second LoC have already delayed due to problems in project selection, land acquisition and other issues.

Of the total amount under the third LoC, $1 billion will be used to develop the power evacuation facilities – a system to expel power from the power plant to the national grid immediately after production – of Rooppur nuclear power plant. A significant amount of the loan will also be spent to upgrade 245km of road stretches in three major highways – Benapole-Jessore-Narail-Bhanga, Ramgarh-Baruerhat, and Moynamoti-Brahmanbaria-Sarail – to provide transit facilities to Indian trucks. In addition, the LOC will finance the upgrade of Chittagong and Mongla seaports under the transit and transhipment agreement between the two countries.

The government will use $500 million to develop and upgrade three economic zones (EZs) in Bangladesh for Indian investors: $100 million to develop special EZ in Mirsarai, Chittagong, $100 million to develop special EZ in Moheshkhali, Cox’s Bazar or Payra, Patuakhali, and $300 million for renovation of several other EZs.

Under the third LoC, at least 75 percent of the procurement for service-oriented projects and 65 percent for public works projects must be made from India.

Funds can be disbursed in 60 months at maximum after the expiration of the tenure set by commercial contracts under the new deal.

In the existing agreements, it is 48 months for service sector and 72 months for projects.

Waiving of 0.5 percent commitment charge from the third LoC will be considered by the Indian authority.

Under the new LoC, the Exim Bank of India will open a representative office in Dhaka for smooth implementation of the projects.

Officials, however, said some projects under the first and second LoCs faced difficulties in project implementation due to a limited tendering system within the Indian market.