In 2010, Bangladesh’s electrification rate was low, and blackouts were frequent. Several initiatives were taken to add generating capacity: the government allowed the installation of rental power plants of 40–115-megawatt (MW) capacity, refurbished old gas turbines, and converted open-cycle gas turbine plants to more efficient combined-cycle power plants. The government also began working on sourcing electricity from neighboring countries, starting with India and later Bhutan, Nepal, and Myanmar.
To support the January 2010 memorandum of understanding between Bangladesh and India to initiate cross-border electricity, the Asian Development Bank (ADB) approved in August 2010 a $100 million loan to the Bangladesh government for the Bangladesh–India Electrical Grid Interconnection Project. A $12 million additional financing was approved in September 2013 to meet cost overruns.
The project’s expected impact was enhanced regional cooperation in the power sector, contributing to economic development growth in Bangladesh. Its intended outcome was successful development and operation of a 400 kilovolt (kV) high-voltage direct current (HVDC) power transmission link between Bangladesh and India. The project was expected to alleviate the growing power crisis in Bangladesh by making available up to 500 MW of additional power by 2012. Additional supply was expected to partially meet the needs of existing and new consumers and to support the achievement of the National Energy Policy’s goal of electricity for all by 2021.
The project’s actual physical outputs were (i) a 500-MW HVDC back-to-back station in Bheramara; (ii) a 27.3 km of 400-kV, double circuit transmission line; and (iii) a 4.5 km of 230-kV double circuit line-in, line-out (LILO) transmission line with a switching station in Bheramara. These outputs connected grids in Bangladesh and India to facilitate electricity trade and meet increasing electricity demand in both countries.
The project’s non-physical outputs were successfully completed through stand-alone technical assistance. These outputs included (i) the development of an interconnection, operation, and power purchase agreement between Bangladesh and India; (ii) selection of a power supplier of up to 250 MW of power on a competitive basis from India; (iii) capacity development in planning, development, operation, and maintenance of power interconnection and power trading; and (iv) implementation of ADB safeguards.
While the project’s attainment of its intended outcome did not eliminate Bangladesh’s energy shortage, it reduced this shortage significantly. With the cost of imported power less than that supplied by the rental power plants, government expenditure on power purchases was effectively reduced by the project. The project also helped reduce poverty directly and indirectly by providing electricity for agriculture, industry, business, commerce, education, and health; creating jobs in the process. The economic impacts envisaged during appraisal had largely been realized, although various factors had supported the growth in the country’s gross domestic product other than more reliable power.
ADB’s South Asia Department rated the project successful. The Power Grid Company of Bangladesh was the project executing agency. India’s central transmission utility, the Power Grid Corporation of India Limited (PGCIL), acted as the executing agency for the Indian side of the interconnection.
