Explained: The Importance Of The New Diesel Pipeline From India To Bangladesh In Enhancing Bilateral Ties And Countering China

Prime Minister Narendra Modi and his Bangladeshi counterpart Sheikh Hasina inaugurated a 131.5 kilometre long India-Bangladesh Friendship Pipeline (IBFPL) from Siliguri in North Bengal to Parbatipur in Banglaesh’s Dinajpur province Saturday (18 March). 

The pipeline, built with Rs 377 crore drawn from a line of credit offered by India to Bangladesh, will carry one million tonnes of high-speed diesel from Numaligarh refinery in Assam to Bangladesh Petroleum Corporation’s Parbatipur depot.

The ground-breaking ceremony for the pipeline, which starts from Numaligarh refinery’s marketing terminal in Siliguri and enters Bangladesh through the Banglabandha border post, was held in September 2018. 

The pipeline will go a long way in meeting Bangladesh’s burgeoning energy needs. Bangladesh Information & Broadcasting Minister Hasan Mahmud told Swarajya from Dhaka that the new pipeline is another milestone in Indo-Bangla ties. 

“Bangladesh’s rapid development is fuelling its hunger for more power. We are very happy that India is meeting this demand not only through this pipeline, but also other projects like the Maitree Super Thermal Power Plant and supply of power from the Godda thermal power plant in Jharkhand,” he said.

Bangladesh faces a major energy crisis that threatens to hobble its growth. Long power cuts are common even in capital Dhaka, and this has stunted production in key export industries, especially the ready-made garments sector that accounts for nearly 85 per cent of the country’s exports. 

In early October last year, Bangladesh suffered a grid failure that left nearly 80 per cent of the country without power. Due to daily power outages, many industrial units in Bangladesh reported a fall in production by up to 50 per cent last year, thus affecting the country’s export earnings. 

The energy crisis in Bangladesh, which is an energy-deficit country, was intensified by the conflict between Russia and Ukraine, and the consequent exponential increase in oil and gas prices. This compelled Bangladesh to stop purchase of gas and shut down several diesel-run power plants. 

Given this scenario, the India-Bangladesh Friendship Pipeline (IBFP) will mark an important milestone in Bangladesh’s quest to fully meet its energy needs, the country’s energy minister Nasrul Hamid told Swarajya. 

Hamid said that the IBFP would have been commissioned earlier had it not been for the pandemic that disrupted construction. 

“This pipeline will result in quick transport of diesel into Bangladesh and will do away with our reliance on importing the petroleum product in oil tankers by road and rail from India that take a long time and are subject to procedural delays at times,” said Hamid. 

The 1320 MW Maitree project is being built under a concessional financing scheme offered by India to Bangladesh. The two countries set up the Bangladesh India Friendship Power Company Limited (BIFPCL), a 50:50 joint venture between India’s National Thermal Power Corporation and Bangladesh Power Development Board. 

Once completed, this will be Bangladesh’s largest power plant. Prime Ministers Modi and Sheikh Hasina jointly unveiled the first unit of the plant during the latter’s visit to New Delhi in September last year. 

Bangladesh is also awaiting power from the Adani group’s 1600 Megawatt thermal power station at Godda in Jharkhand. Tawfiq-e-Elahi Chowhury, the Energy Advisor to Prime Minister Sheikh Hasina, had said last month that Bangladesh is looking forward to importing at least 600 MW of power from this plant to meet its peak summer demand. 

The first unit of this plant has already been synchronised with Bangladesh’s power grid and after completion of some formalities and last-minute negotiations between the two sides, export of power to Bangladesh from the plant is expected to commence within the next few weeks. 

Bangladesh power minister Nasrul Hamid said that his country wants to import more energy from India. “We are holding talks with India on this. We’re exploring all possibilities. The Maitree power plant is just the beginning, and we can have more such projects. India is already playing a large role in helping us meet our growing energy needs and we expect this role to grow exponentially in the coming months and years,” he said. 

India’s help to Bangladesh in meeting its energy needs is also aimed at offsetting that country’s dependence on China, whose investments in Bangladesh’s energy sector stand at US $ 8.31 billion. 

Beijing has offered to help Bangladesh’s transition to renewable sources of energy. But Dhaka is wary of taking loans from China to set up power-generating plants. Bangladesh finance minister Mustafa Kamal had, a few months back, warned against China’s lending policies that push countries into debt. He had cited the example of Sri Lanka that is reeling under an acute financial crisis.

New Delhi has also nudged the United States to step up its energy cooperation with Bangladesh, especially in the field of renewables. US Presidential envoy on climate, John Kerry, offered to help Bangladesh in strengthening its power grid and transition to clean energy. 

Nasrul Hamid said that India is also playing a key role in helping Bangladesh access clean and cheap energy from Bhutan and Nepal. New Delhi has proposed expansion of power trade within the BBIN (Bangladesh, Bhutan, India, Nepal) framework and multilateral talks facilitated by New Delhi are currently on in this regard, he said. 

India has also promised to export power generated from its upcoming hydro-power projects in Sikkim and Arunachal Pradesh once these are commissioned. “We are keen on importing power generated from hydel plants in India as well as Nepal and Bhutan in order to transition to clean energy. India’s help in this transition is critical,” said the Bangladesh power minister.

The India-Bangladesh Friendship Pipeline is, thus, a major milestone in India’s efforts to help Bangladesh tide over its energy crisis. It is also part of New Delhi’s efforts to counter China’s influence over countries in the neighbourhood.