Bangladesh’s Summit Group is set to renegotiate its preliminary agreements for importing renewable energy from India due to a recent regulatory change by New Delhi. The new rule, which allows generators that exclusively export their electricity to now sell locally, has prompted the company to reassess its plans. This policy shift comes shortly after Prime Minister Sheikh Hasina left Bangladesh amid violent protests and has enabled Adani Power to connect its Godda coal-fired plant—previously contracted to export all its output—to India’s domestic grid.
Summit Group Chairman Aziz Khan explained that the policy change might lead Indian partners to prefer selling electricity domestically. As a result, Summit Group will need to invest in transmission infrastructure in Bangladesh and assume additional risks.
Last year, Summit Group, which operates over a dozen fossil fuel-based power plants, signed preliminary agreements with Indian companies, including Tata Power Renewable Energy Ltd, to develop and source 1,000 megawatts of renewable energy. Tata Power declined to comment on the renegotiation plans.
Importing green power is essential for reducing emissions in Bangladesh, which relies on fossil fuels for nearly 99% of its electricity. The densely populated country, with over 170 million people, faces challenges in expanding solar energy due to limited land availability.
Summit Power International, the Singapore-based parent company of Summit Group’s power generation assets, is considering options such as delaying investments until policy changes become clearer and renegotiating financial terms to address increased risks. Khan expressed concern about the rapid policy changes, noting their long-term implications.
Additionally, Summit’s plans to import clean electricity from 700 megawatts of hydro power projects in Bhutan and Nepal, part of a $3 billion regional clean power initiative, face uncertainty due to a new government in Bangladesh. No final decisions have been made regarding these cross-border investments, and Summit will continue to invest in domestic projects. Khan also highlighted that the new Bangladeshi government’s suspension of a law that allowed non-tendered power supply contracts has influenced his decision to review ongoing projects.
