Power deal between India & Bangladesh - Fusion - WeRIndia

Major power deal between India and Bangladesh

Major power deal between India and Bangladesh

A contract to build a $1.6 billion power plant in Bangladesh between a state-run Indian firm and Bangladesh is all set to be finished. The Indian firm would be beating out a Chinese competitor in this latest commercial conflict.

Recently, China had success in pushing development projects in Sri Lanka. The new breakthrough in Bangladesh is a great news for Indian officials who have been worried over China’s encroachment on the territory India considers its own back yard.

According to a report, China is building a “String of Pearls” across the Indian Ocean from Gwadar port in Pakistan to Djibouti on the African coast – the place it is building a naval base.

India’s Bharat Heavy Electricals Limited (BHEL) conducted several years of negotiation and finally a contract will be signed on February 28 to build a 1,320-megawatt (MW) thermal power station in Khulna, southern Bangladesh. The announcement was made by officials from both Indian and Bangladesh.

The competition from China – Harbin Electric International Company Ltd already has power projects in Iran, Turkey and Indonesia etc. It lost this bid because of technical grounds according to a Bangladesh official.

However, according to Anwarul Azim, a spokesman for the Bangladesh-India Friendship Power Company Limited, BHEL was the lowest bidder which helped it win the contract.

The offer by BHEL has been backed by Exim Bank which is considered the Indian government’s external lending arm. Approximately 70 percent funding of the project’s costs are given at a soft interest rate of around 1 percent above Libor.

Recently, both India and China have been competing with bids for infrastructure projects in the region. Indian Prime Minister Narendra Modi pushed for better engagement with smaller neighbours after years of neglect.

Losing this power project is the second setback for China. The first happened when Japan muscled into Bangladesh’s port sector last year and made an offer of 80 percent funding on easy terms for a seaport which is just 25 km from an $8 billion deep water port Beijing was negotiating to construct.

Image Credit:- “India-Bangladesh enclaves 6” by  WonderWhy is licensed under CC BY 2.0

Image Reference: https://www.flickr.com/photos/107442568@N08/11255163343

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