Ambassador Farooq Sobhan
President and CEO,
Bangladesh Enterprise Institute (BEI)
Ambassador Farooq Sobhan is a former Bangladeshi diplomat. He served in various capacities in the Bangladesh Government and Foreign Service. He is currently the President and CEO of the Bangladesh Enterprise Institute (BEI) which is an independent research institute committed to the development of the private sector in Bangladesh and is involved in a variety of research projects. BEI under his leadership has played a leading role in strengthening Corporate Governance in Bangladesh.
Recently, Ambassador Sobhan spoke at an event at the Jawaharlal Nehru University (JNU) in India. This was a meeting regarding energy security and energy cooperation from the perspective of India. IBT’s Irad Mustafa met with Ambassador Sobhan at the BEI headquarters to have an enlightening talk regarding the various areas of energy cooperation between Bangladesh and its neighbors which were discussed during his recent visit to India.
“I was invited to speak about energy cooperation in the Bangladesh, Bhutan, India, Nepal (BBIN) region with special reference to Bangladesh’s energy profile and long-term energy requirements. So I started off by speaking about vision 2021 and vision 2041. Within the framework of vision 2021, Bangladesh hopes to add roughly another 10,000 megawatts in the next 4 years to our current 14,000 megawatts power generation capacity,” explains Ambassador Sobhan. After reaching this target, Bangladesh hopes to take it from 24,000 megawatts to 60,000 megawatts by 2041. These are fairly ambitious targets but according to Ambassador Sobhan, this long-term scenario can be achieved through a mix of different energy sources. “The government plans to reach these targets through a substantial increase in coal-fired power plants, as well as LNG-fired power plants. Also, by this time, the Rooppur Nuclear Power Plant will be fully operational, so it will be a mix of coal, LNG, nuclear power and renewable energy.”
Out of the renewable energy spectrum, Bangladesh has given priority to solar energy in particular but the next big target is to look into energy imports from our neighboring regions. “As you know, we are already importing 600 megawatts from India. 100 megawatts from Tripura and another 500 from the western grid in West Bengal. One big development in the energy sector has been the grid connectivity to both the Indian North East and the rest of India through West Bengal. We are hoping that the import of power from Tripura will be doubled in the near future and we are also hoping more power will be available from West Bengal during the off-peak hours,” the Ambassador elaborates. ”Currently, we are taking advantage of the fact that their peak demand hours and our peak hours come at different times so we should take further advantage of this in terms of importing additional power”.
Regardless of these developments, Ambassador Sobhan is of the opinion that the most significant recent development has been the trilateral agreement between India, Bhutan and Bangladesh, under which Bangladesh will be able to import hydroelectric power from Bhutan. He expounds, “India will permit grid connectivity and allow us to import power from Bhutan. Now in doing so, there are some issues that come into play. At this moment, the power from the ongoing Chuka 2 Hydroelectric Project is fully committed to India. However, we are envisioning that following the completion of this project, the bulk of the power from the next project will be exported to Bangladesh. We can maybe expect a hydroelectric power project generating 1,500 megawatts of power; under this project the power could be shared or divided between India and Bangladesh.” The amount that will be available for export and the role of both Bangladesh and India respectively in this joint venture project will have to be discussed along with several other issues. Perhaps the most of important issue will be the task of mobilizing the financing for the project. Ambassador Sobhan elaborates, “The terms and conditions of the payment for the power we import from Bhutan will need to be negotiated. We can take advantage of the fact that we already have previous agreements in place, so working out the mechanics and details for a trilateral agreement should not be difficult.”
During his recent visits to India, outside his JNU meeting, he had the opportunity to speak to numerous people who work in this field. He says, “The one question I asked most people was whether India would now be willing to accept external financing for energy projects of this kind and the answer I received was ‘yes’ ”. This means that India would not object to multilateral financing which can come from sources such as the ADB and/or the World Bank. Also, India would not stand in the way of FDI for such projects. He continued, “In principle, we are seeing both India and Bangladesh moving towards making this energy alliance the centerpiece of the cooperation between our two countries. We will obviously need to mobilize quite a lot of funding because it will be for both power generation as well as grid connectivity. What is now emerging clearly is that, as we are looking at our long term scenario to meet these targets, if we achieve 24,000 megawatts by 2021, we would need to add another 36,000 megawatts in the next twenty years after that. In that profile, it’s difficult to say now, but maybe we would be looking at 10-15% of imported power.”
This 10-15% of imported power can be acquired from a few potential sources according to the BEI President and CEO. Elaborating on this topic, Ambassador Sobhan started with the issue of Nepal, “Similar to how we have a trilateral understanding with Bhutan, we could also have an agreement for the import of hydroelectric power with Nepal. It has been estimated that the hydroelectric power potential of Nepal is roughly around 83,000 megawatts and at the moment, this potential has hardly been tapped. From what I’ve heard, only around 700 megawatts is currently being produced. So there is a huge potential in the case of Nepal. The country now has the lowest per capita consumption of power in the BBIN region.” As the discussion unfolded, he went on to elaborate on other potential sources of power to be imported, “The Indian North East has a lot of hydroelectric power potential. These would be run-of-the-river hydroelectricity projects so there would be very little population displacement. In the past, we used to discuss another subject or source of power, an idea, which is now being revived. This is the idea of a gas pipeline from Myanmar to Bangladesh and on to India. This would be predicated on additional gas being available in Myanmar for export purposes. Of course, we are hoping that in the meantime, we would be able to find new gas fields in Bangladesh, onshore and offshore, and in the process, our reliance on imported coal would decline. A fourth source of generating additional power could come from the TAPI gas pipeline. This is an old project which visualized the export of gas from Turkmenistan through Afghanistan to Pakistan to India and eventually to Bangladesh. Bangladesh has formally applied to be a member of this project and my understanding is that the TAPI project will soon mature and be ready for implementation.”
This transnational pipeline has faced a number of political, technical, financial and security issues but one by one each of these issues are in the process of being resolved and a formal launching of the project will take place soon. So effectively, there could be a gas pipeline running all the way from Myanmar to Turkmenistan and those that have the gas will put it into the pipeline and those who want to buy the gas will import it off the pipeline. Ambassador Sobhan further explains, “This is how it’s happening in other parts of the world. No one will then really need to ask if this is Bangladeshi gas or Myanmar gas. It will just be a transaction based on supply and demand, pricing and availability.”
The Ambassador is quite hopeful regarding the developments in the area of energy cooperation. Speaking of the positive signs from the government, he says, “There are multiple initiatives at the inter-governmental level and we are now seeing regular meetings between the energy ministers. We’re also seeing regular meetings at the technical and operational levels between governments. There’s a lot happening at the g2g level and there’s also a lot happening in the private sector level. As you know we are also developing a large energy hub at Matabari which will be funded by the Japanese. They have offered a $6 billion line of credit as a soft loan for the energy hub. We will also have a deep sea port around the two power plants that will be built in Matabari.”
Similarly, there are other projects being discussed in the private sector and they are at various stages of progress and development. Several of these projects in the energy sector are joint ventures with India, either in the private sector or with Indian public sector companies. Bangladesh is also looking at some energy projects with China, meaning, we are now exploring multiple sources of cooperation to meet the demand to realize vision 2021 and 2041. As we neared the end of the discussion, the Ambassador outlined the key requirements for Bangladesh for it to reach its long-term targets,“If we are to attain our objective of becoming a middle-income country by 2021 and a high-income country by 2041, we will need to improve power generation, attract large amounts of foreign investment and improve infrastructure. These three are all very closely interlinked. Here, the government will also need to improve its delivery and implementation mechanisms and build up a good pool of technical expertise and know-how. This will be of crucial importance when they will have to negotiate and contract fairly complex agreements with foreign investors and companies.”