Dhaka to import power as China’s influence grows

Energy-hungry Bangladesh is looking to seal its first international power importation deal with Burma for electricity from two new dams in Arakan state.

The announcement came this week after high-level Bangladeshi delegations visited the country. The two dams in the Michuang and Lemro areas would supply power to Bangladesh’s southern Cox’s Bazaar and would be jointly built by Shwe Taung Development Company and, perhaps significantly, a Chinese company.

The total quantity of electricity is expected to be around 575 megawatts (MW), with one dam providing the bulk 500 MW and second smaller one with 75 MW.

The move, which also could herald power-trading with neighbouring India, will look to smooth over serious shortfalls in Bangladesh’s electricity capacity, with demand at around 6000 MW and supply only hitting some 4200 MW. Such shortages, alongside steady growth of industry in the country, have lead to harsh austerity measures to balance the electricity demands.

Dhaka was also recently visited by the governor of China’s southwestern Yunnan province, Qin Guangrong. Representing China and his state, the governor discussed plans to build a road linking the province with Bangladesh, a project that would invariably traverse Burma.

China has become the Bangladesh’s largest trade partner, despite being virtually surrounded by neighbouring giant India, for whom Dhaka has had at times a fractious relationship.

The Awami League government of Sheikh Hasina has however made strong efforts with bilateral relations and the move could help the country’s industrial sector as Beijing reportedly de-listed 400 Bangladeshi products from requiring duty when imported to China.

Bangladesh meanwhile has a strong garments industry which has in the past competed with China for cheap exports to the west. China is now however looking at moving up the economic ladder into higher-end manufacturing, with the past year witnessing increased labour costs and strikes in foreign-owned Chinese factories.

The proposed project would include a highway and rail link from Bangladesh’s major port city, Chittagong, to Yunnan’s capital, Kumning, entirely funded by the Chinese. The project could bring spin-off benefits for Burma: devoid of indigenous infrastructure schemes, the transport links could help boost trade, both internally and with its two vivacious neighbours. Press reports in Bangladesh sounded a note of scepticism as to how receptive the Burmese regime would be to the proposal.

The Chinese visit follows a March trip made by Hasina to China in which she swung by Yunnan where the ideas were mooted. The bilateral talks were not however purely on infrastructure: Memorandums of Understanding’s (MOU) were signed on a raft of issues from agriculture and education to civil aviation.

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