Germany offers Dhaka support on inter-regional electricity trade

In a recent development cooperation meeting, Germany offered to support Bangladesh in inter-regional electricity trade, developing a smart grid system and promoting rooftop solar power generation across the country.

This information was disclosed in a report summarising a meeting held between Bangladesh’s Economic Relations Division (ERD) and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) held at the ERD auditorium in Dhaka recently.

ERD Additional Secretary Uttam Kumar Karmaker represented Bangladesh in the meeting, while the German ministry’s Head of Division Policy Issues of Cooperation with Asia and South Asia Barbara Schaefer represented Germany.

According to the meeting’s summary, the German authority is interested to assist Bangladesh in inter-regional electricity trade with India, Bhutan, and Nepal. It adds that Germany is interested in helping Bangladesh develop a smart grid solution, in which Bangladesh has also shown interest.

Additionally, the German government has suggested involving the government agencies in Bangladesh in installing rooftop solar panels and giving incentives in this regard. This way, the massive potential of solar power can be harnessed.

The next summit on development cooperation between the two countries is set to be held in Berlin in November 2022.

On the condition of anonymity, an ERD official said after the meeting, “We will ask for assistance from the German Agency for International Cooperation or (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH — GIZ) to develop connection lines for imported electricity and improvement of the national grid in the next meeting in Berlin.”

Mentioning that GIZ has already shown interest in investing in this sector, the official added, “The government needs foreign funds to make up for the power shortage in the country.”

According to Bangladesh Power Development Board (BPDB) data, the electricity demand in the country is about 15,000 Mega Watt. However, the power plants in the country are cumulatively producing around 12,000-13,000 MW of electricity, resulting in a shortfall of around 1,500-3,000 MW.

On October 4, 130 million people were affected as a grid failure caused a seven-hour blackout across most of Bangladesh. The sudden outage occurred shortly after 2:00pm, according to BPDB.

Then on October 16, the government suspended two officials of the Power Grid Company of Bangladesh (PGCB) for their negligence of duty that led to the nationwide grid failure.

State Minister for Power, Energy and Mineral Resource Nasrul Hamid has recently said that to tackle the energy issues in the country, there is a plan to increase electricity import from Nepal, Bhutan and other neighbours up to 9,000 MW.

An agreement has already been made to import 500 MW of electricity from an Indian company’s power plant in Nepal. Moreover, Bangladesh will also spend Tk 41,88 billion in the next five years to import electricity from India.

Special assistant to the chief adviser of the caretaker government of Bangladesh in 2007-2008 and BRAC University Vice President Dr M Tamim told the Business Post that the current government can take loans from Germany to assist in inter-regional electricity trade and developing a grid system. “They can assist Bangladesh with advanced technology, so it should not be a problem. However, the control should be in Bangladesh’s hands,” he said.

“If Germany invests in solar power, Bangladesh should keep in mind how they’ll receive the return when they reach an agreement,” M Tamim added.