Awaiting India’s nod for Bangladesh investment in 1,024 MW Dorjilung project in Bhutan

Bhutan is all ready to offer Bangladesh the opportunity to invest in a 1,024 MW run of the river Dorjilung hydropower project. This is once India agrees to a three country memorandum of understanding (MoU) on hydropower development, which has so far been endorsed by both Bhutan and Bangladesh.

The Minister for Economic Affairs, Lyonpo Norbu Wangchuk said that the MoU had been sent two months ago to both Bangladesh and India. Bangladesh gave assent to the MoU around a month ago while the answer from India is awaited.

The 1024 MW Dorjilung project will be on the Kurichu River. The reason for offering it to Bangladesh is that firstly it is outside the 10,000 MW agreement between the Bhutan and India and secondly its Detailed Project Report, prepared by the Druk Green Power Corporation, is ready.

Lyonpo Norbu Wangchuk said that this whole idea was discussed between the three countries based on the SAARC Energy Cooperation Framework signed by all the SAARC countries in the 18th SAARC summit in November 2014.  He said the whole idea behind this framework was to provide for better regional integration.

The minister said that Bangladesh has always expressed willingness to import or invest in hydropower in Bhutan while India has always shown willingness in bringing about regional integration in energy.

Lyonpo said that first step was in signing a generic MoU between the three countries.

“India is looking into the MoU and we hope that India will soon give their endorsement of the MoU to take this forward,” said the minister.

The minister said once the MoU is agreed to by all three countries they will then form a joint tripartite task force which will look in detail at the cooperation between the three countries.

The exact modality of the Bangladesh’s potential investment into Dorjilung will have to be worked out later by experts, said the minister.

Meanwhile the Financial Express paper published from Dhaka said that Bangladesh is planning to invest around 1 bn USD in Bhutan’s hydropower sector.

The report said that Bangladesh has already completed preliminary talks with Bhutan as well as neighboring India to facilitate import of hydroelectricity crossing over Indian territories.

The Financial Express report further pointed out that Bhutanese Economic Minister Lyonpo Norbu Wangchuk already visited high-voltage direct current (HVDC) back-to-back station of the state-owned Power Grid Company of Bangladesh Ltd (PGCB) at Bheramara in Kushtia last October to see the electricity-import infrastructure in Bangladesh.

Currently Bangladesh imports around 500 megawatts (MW) of electricity from India. Import of another amount of 100MW electricity from India’s Tripura state may start in March.

If this deal goes through then it would mark a tectonic shift in Bhutan’s hydropower development which has so far seen only India investing and buying power from Bhutan. The entry of neighboring Bangladesh would mean both a new investor and also customer.

This also comes in the backdrop of the failure of the 10,000 MW by 2020 dream as the Indian government has only confirmed 6,476 MW by 2022 due to funding constraints.

Bhutan’s DGPC has also started doing its own small and medium sized projects like Dagachu, Nikachu etc.

However, the entire proposal for Bangladesh’s investment in Bhutan hinges in the corridors of New Delhi whose assent is absolutely critical given that any power lines from Bhutan to Bangladesh will go through Indian land.

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