Why Bangladesh Is Paying More For Chinese Power Despite Objecting To India’s Charge

Bangladesh's power strategy has come under scrutiny after it objected to India's proposed Settlement Nodal Agency (SNA) charge while preparing to pay Taka (Tk) 25 per unit for electricity from a Chinese waste-to-energy plant.

The figures look starkly different, but they apply to very different things.

India initially proposed an SNA charge of ₹ 0.01 per unit before reducing it to ₹ 0.005 per unit after an issue was raised by the Bangladesh Power Development Board (BPDB). The Chinese tariff, meanwhile, is the price for electricity generated by the Aminbazar waste-to-energy project.

The Tk 25 figure is about 127% higher than the roughly Tk 11 per unit Bangladesh paid Indian suppliers in FY2025-26. So what explains the apparent contradiction?

What Is India's Rs 0.005 SNA Charge?

The SNA charge is not the price Bangladesh pays for electricity generated in India. It is a separate charge linked to grid and administrative functions involved in cross-border power transactions.

According to The Business Standard and The Daily Star, it covers scheduling, metering, energy accounting and settlement of cross-border electricity transactions. The arrangement is linked to an SNA agreement between BPDB and India's NTPC Vidyut Vyapar Nigam Ltd (NVVN).

The charge applies to 1,160 MW of scheduled imports through NVVN. The Daily Star reported that if the full 1,160 MW were imported continuously for a year, the fee would be about ₹ 5.1 crore, or roughly Tk 7 crore. Bangladesh has arrangements to import up to 2,656 MW from India through different agreements.

Why Did Bangladesh Object?

Dhaka's concern was about adding a recurring charge to an already large electricity import bill, not about paying India an extra ₹ 0.005 for the electricity itself.

The Daily Star reported that Bangladesh's electricity imports from India more than doubled from 8,103 GWh in FY21 to 16,438 GWh in FY26. In FY25, Bangladesh paid about Tk 19,225 crore for electricity imported from India, around 15.8% of its total electricity purchase cost of Tk 1,21,420 crore.

That explains why even a small per-unit charge can attract attention. But the SNA fee remains tiny compared with the underlying cost of electricity.

What Is The Chinese Tk 25 Project?

The Chinese project is a different proposition. At the Aminbazar landfill in Dhaka, China Machinery Engineering Corporation (CMEC) is developing a waste-to-energy plant expected to generate about 42 MW.

New Age reported that Bangladesh will purchase the electricity at Tk 25 per unit, with State Minister Mir Shahe Alam saying generation is expected within about 18 months. A report by Tob News said the final tripartite contract was scheduled for September 2 in Beijing.

The project is intended to address Dhaka's waste burden while adding electricity. Dhaka North City Corporation is expected to provide land and municipal waste, while the plant will generate power for the national grid.

Why Is The Tariff So High?

The first point is that the Tk 25 figure is not necessarily a newly increased dollar tariff demanded by the Chinese company. The project agreement signed in 2021 set the electricity price at 21.78 US cents per unit for 25 years. At the exchange rate then, that was about Tk 18.29 per unit.

Recent reports by Tob News and The Voice News say the same dollar-denominated tariff now translates into roughly Tk 25 as the taka has weakened against the US dollar. The higher taka cost is therefore substantially linked to currency depreciation and the project's long delay, rather than simply a fresh increase in the Chinese company's dollar price.

The tariff also reflects the nature of the project. Waste-to-energy involves waste processing and landfill management alongside power generation. Bangladesh's state minister has argued that the environmental and waste-management benefits should be considered along with the electricity price.

Why Does Bangladesh Still Want It?

Bangladesh is facing a severe power crunch, with gas supply disruptions contributing to shortages and prolonged load-shedding. At the same time, Dhaka has a growing waste-management problem. Aminbazar offers a way to pursue both objectives through one project.

The scale matters, however. The Chinese plant's roughly 42 MW is small compared with Bangladesh's arrangements with India for up to 2,656 MW. The Aminbazar project therefore cannot realistically replace India's role in Bangladesh's power supply. Its main attraction is converting municipal waste into an energy source while reducing the burden on a major landfill.

That means Bangladesh is effectively paying for more than electricity alone. The government expects waste treatment and environmental gains alongside power generation. That does not make Tk 25 a low tariff, but it explains why the project is being evaluated differently from a conventional electricity import.

Is Bangladesh Choosing China Over India?

Not really. The apparent contradiction comes from comparing two unrelated charges. India's ₹ 0.005 is a cross-border settlement and grid-related fee, while China's Tk 25 is the generation tariff for electricity from a specialised waste-to-energy plant.

India remains a major electricity supplier to Bangladesh, with existing arrangements covering thousands of megawatts. The Aminbazar plant, by comparison, is a small project whose primary objective is to tackle Dhaka's waste problem.

The more relevant question is whether the long-delayed Chinese project can deliver its promised waste-management and environmental benefits at a cost Bangladesh can afford. With power shortages already straining households and businesses, the Tk 25 tariff will attract scrutiny. But this episode is less about replacing Indian power with Chinese power and more about how Dhaka is balancing energy security, waste management, foreign-exchange pressures and infrastructure costs.