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Cross-Border Electricity Trade Laws in Bangladesh

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In this age of global interconnection, the energy sector is undergoing a dramatic transition. Bangladesh is actively participating in the development of Cross-Border Electricity Trade power trade, which is one of the characteristics that define this period.

In this paper, the author investigates the legal architecture that regulates international commerce of electricity in Bangladesh. Specifically, the author investigates the key rules, regulations, and considerations that form this dynamic industry.

Power Sector Reforms in Bangladesh:

Bangladesh’s power industry has been the subject of significant recent changes in an effort to meet the rising demand for electricity brought on by the country’s rapidly expanding population and to stimulate economic growth.

These changes are being driven by the Power Division, which is housed inside the Ministry of Power, Energy, and Mineral Resources. The Power Division’s primary focus is on expanding the variety of energy sources available and incorporating international power trading into the national energy infrastructure.

Bangladesh’s Cross-Border Electricity Trade Policy:

The government of Bangladesh has developed a comprehensive Cross-Border Electricity Trade Policy in order to manage and promote power trade with countries that are geographically adjacent to Bangladesh.

This policy encourages cooperation and increases the level of energy security in the area by outlining the concepts, norms, and processes that regulate electrical transactions that cross international borders.

Bilateral and Multilateral Agreements:

Agreements on a bilateral and multilateral level are essential to the formation of international commerce in electricity. The importation and exportation of power has been made easier as a result of the agreements that Bangladesh has signed with its neighbors, including India and Myanmar.

These agreements determine the conditions of commerce, which include pricing procedures, grid connection, and dispute resolution frameworks. As a result, they build an environment that is stable and transparent for international business operations.

The Electricity Act, 2018:

The Electricity Act of 2018 is the fundamental piece of law for Bangladesh’s power industry. It lays out the legal framework for the production, delivery, and exchange of electricity and includes regulations pertaining to activities that take place across international borders.

This legislation grants regulatory agencies the authority to supervise and control the trade of electricity across international borders, with the goal of guaranteeing conformity with national laws and international accords.

Regulatory Bodies:

The Bangladesh Energy Regulatory Commission (BERC) is a government agency that plays a crucial part in the regulation of the power industry, including international commerce in energy.

The BERC is responsible for the establishment of tariffs, the granting of licenses, and the monitoring of compliance, all of which contribute to an open and competitive market. Its participation assures compliance with regulatory norms in international transactions, so boosting investor trust and contributing to the economy’s long-term viability.

Cross-Border Electricity Interconnection Infrastructure:

Strong connectivity infrastructure is required for effective exchange of electricity across international borders. Projects such as the Bangladesh-India Power Interconnection and the Bangladesh-Myanmar Power Interconnection are examples of how Bangladesh has made significant investments in the improvement of its interconnection capabilities with nations that are located in close proximity to it. These efforts aim to improve grid connection in the hopes of easing the process of trading power across international borders.

Tariff Determination and Pricing Mechanisms:

The establishment of tariffs and the establishment of pricing systems are essential aspects of international commerce in electricity. The regulatory system, which is governed by the Electricity Act and is supervised by BERC, provides open and public procedures for determining electricity rates.

Pricing mechanisms take into account factors such as production costs, transmission losses, and international market rates, ensuring equitable and competitive pricing in Cross-Border Electricity transactions.

Risk Mitigation and Dispute Resolution:

Inherently laden with risks, cross-border electricity trade is addressed through mechanisms in the legal framework for risk mitigation and dispute resolution. Agreements and policies outline dispute resolution procedures, often incorporating arbitration mechanisms.

These frameworks provide a structured approach to resolving disputes, ensuring the continuity and reliability of Cross-Border Electricity power exchanges.

Environmental and Social Considerations:

As cross-border electricity trade expands, the legal framework in Bangladesh incorporates guidelines and standards to address environmental and social impacts. Integrating sustainable practices, environmental impact assessments, and community engagement becomes integral, aligning cross-border electricity trade with broader sustainability goals.

Future Prospects and Challenges:

The future of cross-border electricity trade in Bangladesh presents immense potential, accompanied by challenges. Balancing the energy needs of a burgeoning population, ensuring infrastructure resilience, and navigating geopolitical complexities remain ongoing challenges. The legal framework will need to evolve to navigate these challenges and seize emerging opportunities in the regional energy market.


Emerging as a key driver for regional energy cooperation and economic growth in Bangladesh, cross-border electricity trade is governed by a robust legal framework.

This framework, extending from policy formulation to regulatory oversight, mirrors the government’s commitment to fostering a conducive environment for sustainable cross-border power exchanges.

As Bangladesh progresses in its trajectory of energy reforms, the efficacy of the legal framework will play a pivotal role in ensuring a reliable, affordable, and environmentally sustainable energy future for the nation and its neighboring countries.”


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