Summit Group, leader in Bangladesh’s energy sector, is adjusting its plans to import renewable energy following a recent regulatory change in India.
This change now allows Indian producers, initially obliged to export their production, to redirect it to the local market.
This development disrupts the agreements established between Summit and its Indian partners, notably Tata Power Renewable Energy Ltd, and forces the group to reassess its investments in the transmission infrastructure needed to import energy into Bangladesh.
Cross-border investment review
This situation is creating uncertainty for Summit, which had planned to import up to 1,000 MW of renewable energy to reduce its dependence on fossil fuels.
Faced with these new contingencies, Summit Power International, the Group’s Singapore subsidiary, is examining the possibility of postponing certain investments pending more precise political and regulatory clarifications.
Recent political tensions in Bangladesh, exacerbated by the hasty departure of Prime Minister Sheikh Hasina, add to the complexity of these projects.
Impact on regional projects
The changes to India’s export regulations have had an immediate impact on Summit’s regional ambitions.
The group was planning massive investments in hydroelectric projects in Bhutan and Nepal, worth a total of $3 billion.
These projects were intended to diversify Bangladesh’s electricity supply sources, but new economic and regulatory uncertainties are jeopardizing these initiatives.
Strategic adaptation in the face of uncertainty
In this context, Summit must adapt its strategy to minimize the risks associated with these cross-border projects.
Aziz Khan, President of Summit Group, points out that the volatility of national and regional policies could generate additional costs, compromise the profitability of investments and delay their implementation.
Consequently, the company is exploring options to secure its energy projects while maintaining a focus on the domestic market, where demand remains strong.
Summit continues to closely monitor political developments in the region, while seeking to capitalize on more stable investment opportunities in Bangladesh.
This pragmatic approach could enable the Group to navigate an ever-changing environment while meeting the country’s growing energy needs.
