Bangladesh’s energy diplomacy: Looking back and way forward
Bangladesh has precious little experience in energy diplomacy, which refers to the practices and norms by which political institutions and large companies cooperate to promote energy trade.
Energy diplomacy remains at the forefront of many country's foreign policy, including major economies like China and the United States (US) of America.
Aimed at meeting local energy needs and managing the implications of the energy to national wealth and geopolitical power ratio, US energy diplomacy promotes a stable global energy supply.
It also encourages efforts to strengthen ties with new and emerging producers through international fora.
Despite only having begun in the early 1990s, China energy diplomacy recently gained pace through its Belt and Road Initiative (BRI).
Therefore, it is worthwhile to take a look back on all the international, both bilateral and multilateral, energy agreements made by Bangladesh since its independence.
Since the 1970s, when it was known as the Union of Soviet Socialist Republics (USSR), Russia has remained a tested strategic partner for Bangladesh for both economic and energy issues.
The bilateral diplomatic relationship between the two countries, which formally began in January 1972, was strengthen in the early 70s through financial and technical assistance from Russia.
With a view to revitalise a war-raved economy, the former Soviet Union helped develop the country's biggest power plant, the Ghorashal Power Station, in Palash Upazila of Narsingdi district in 1974.
Russia also aided in the construction of the Siddhirganj power plant in Narayanganj and an electrical equipment factory Chattogram.
A more recent example for Russian assistance would be the signing of a G2G agreement for the construction of the Rooppur Nuclear Power Plant in November 2011.
The deal was made in line with the government's 'Universal Electrification-2021' plan, which features Rosatom, a Russian state corporation, as a key stakeholder.
Specialized Russian energy companies like Gazprom EP International and Inter RAO-Engineering have since signed multiple contracts with Petrobangla, BAPEX, BGFCL and the Bangladesh Power Development Board.
The deals were signed seeking cooperation on a number of activities, ranging from the exploration and development of hydrocarbons to repairing and modernising existing plants.
Chinese investment towards the Bangladesh's energy sector gained momentum after a visit from President Xi Jinping in October 2016. During his visit to Dhaka, the Chinese premier penned a number of agreements, totalling about USD 10 billion.
Those investments were made mainly in the energy sector, specifically coal based power plants. This includes the 1,300 megawatts (MW) coal-fired power station in Chattogram, another in Patuakhali and the proposed 1,300 MW plant in Cox's Bazar.
Albeit a bit rocky, the bilateral relationship between Bangladesh and India, which began in the early 70s, has been very significant for both countries.
After Indian Prime Minister Narendra Modi unveiled the 'Southeast Asia-first' policy, an energy starved Bangladesh has been responsive to important energy deals with its neighbour.
As of 2019, Bangladesh had imported 1160 MWs from India.
The country also expects to buy 2,000 MWs of electricity from large solar parks being developed in Gujarat and Rajasthan. Besides, deals were signed on a number of deals for the construction of a 130 km oil pipeline, a 1320 MW coal-fired Maitree thermal power plant in a 50:50 JV between the National Thermal Power Corporation (NTPC) of India and Bangladesh Power Development Board.
Markedly, Indian public institutions like the Indian Oil Corporation, Numaligarh Refinery Limited, Petronet LNG Ltd are seen working with their Bangladeshi counterparts in the rising oil and gas sector.
Bangladesh-Japan diplomatic relations will reach at 50-year landmark in 2022. Since its inception, Japan has been a major partner for the development of Bangladesh's infrastructure.
To help realise Bangladesh's 'Vision 2021', Japanese official development assistance has played a pivotal role. Also, Japan will aid in the construction of Matarbari's coal-fired power project to support the development of the Moheshkhali-Matarbari area and make it an energy hub in the sub-continent.
In totality, Japan has become the biggest bilateral development partner for Bangladesh. At present, about 300 Japanese companies are doing business in the country.
As it was with all lower-middle income countries before 2010, energy diplomacy did not feature prominently in Bangladesh's overall diplomacy.
With the country's economy booming and the rising demand for imported energy, the government has set a target to significantly expand the channels of energy supply.
In the age of 'economic globalization', no country can design and practice fruitful energy-related diplomatic strategies without integrating global energy policy.
To feed the energy demand corresponding to Bangladesh's growing economy, Bangladesh energy diplomacy should primarily focus on ensuring energy security followed by energy equity and environmental dimension.
TO-DO LIST:
1) Sign win-win situation contracts
2) Gradually decrease dependence on specific energy sources
3) Strengthen bureaucratic capabilities
3) Implement regional energy agreements to share hydropower
4) Consideration security issues while signing energy deals
5) Prioritise technology-centric deals
6) Establish independent advisory panel on climate change
7) Prioritise environmental issues while negotiating
8) Consistently improve ability to seize the available opportunities in energy market
9) Emphasise on issues like 'low-cost transportation' and 'reliable storage' during negotiations
The writer is a deputy director of the Bangladesh Bank.