India Expands Regional Power Influence as Dhaka Balks at Half-Paisa Grid Fee Amid 127% Chinese Cost Surge

Cross-border power dynamics in South Asia have come into sharp focus as Bangladesh's energy procurement strategy exhibits a stark economic contrast. The Bangladesh Power Development Board (BPDB) recently raised objections to a proposed operational charge by India's Central Electricity Regulatory Commission (CERC). Initially proposed at ₹0.01 per unit and subsequently halved to ₹0.005 per unit (half a paisa), the fee covers grid management and transaction settlements. Simultaneously, Dhaka is advancing a plan to purchase power from a Chinese-built municipal waste-to-energy project in Aminbazar at Bangladeshi Taka (Tk) 25 per unit—a 127% markup over its average procurement price for Indian electricity.

The Dispute Over Grid Settlement Charges

The operational levy in question is a Settlement Nodal Agency (SNA) charge formulated under Indian regulatory frameworks to manage the administrative and technical complexities of cross-border energy flows. The mechanism covers scheduling, metering data reconciliation, energy accounting, and financial clearance for 1,160 megawatts (MW) of power delivered through India's state-owned NTPC Vidyut Vyapar Nigam Ltd (NVVN).

Similar standard SNA agreements are already operational with Nepal and Bhutan at the same ₹0.005 per unit rate. If Bangladesh imports its full 1,160 MW NVVN allocation continuously, the aggregate annual settlement fee amounts to approximately ₹5.1 crore (around Tk 7 crore)—a marginal fraction of Bangladesh's multi-billion-dollar power import budget.

Cost Comparison: Indian Baseload vs. Chinese Capital Projects

Bangladesh currently imports up to 2,656 MW of electricity from Indian sources to alleviate persistent domestic gas shortages and generation shortfalls. In FY 2025–26, the weighted average tariff paid by Bangladesh for Indian power was approximately Tk 11 per unit.

Key components of India's power export portfolio to Bangladesh include:

• Adani Power: Supplying 1,496 MW from its dedicated ultra-supercritical coal plant in Godda, Jharkhand, accounting for the largest single cross-border supply tranche.
• NTPC Vidyut Vyapar Nigam (NVVN): Delivering 250 MW from NTPC stations, 300 MW from Damodar Valley Corporation (DVC), and 160 MW from Tripura State Electricity Corporation.
• PTC India and Sembcorp Energy India: Supplying a combined 450 MW under long-term power purchase agreements.

In contrast, the 42 MW Chinese waste-to-energy facility in Aminbazar, Dhaka, carries an agreed dollar-denominated tariff (originally structured at 21.78 US cents per unit) that currently translates to Tk 25 per unit due to currency depreciation. While Bangladeshi officials defend the plant on the grounds of urban municipal waste management, the 127% premium over Indian commercial tariffs underscores the significant cost efficiency of India's established power grid infrastructure.

Strategic and Financial Takeaways for Indian Investors

The controversy underscores structural advantages for the Indian energy sector and related capital market participants:

Monetisation of Grid Infrastructure: The institutionalisation of SNA charges by CERC establishes a clear precedent for Indian transmission and nodal agencies to recover operational overheads across regional cross-border grids, including future expansions into Nepal, Bhutan, and Sri Lanka.

Robust Export Realisations for Power Majors: Indian power utilities—including NTPC, PTC India, and private players like Adani Power—continue to benefit from multi-decade, dollar-linked or rupee-denominated power export contracts, insulating earnings from domestic merchant price volatility.

Reinforced Pricing Power: With alternative energy projects requiring steep capital outlays and high feed-in tariffs, Indian baseload and thermal imports remain essential for South Asian regional grid stability, consolidating New Delhi's position as the primary energy trading hub for the subcontinent.

Tags: NTPC Adani Power PTC India CERC Power Sector Cross-Border Energy Trade