The proposed 37% tariff on Bangladeshi exports to the United States threatens to undermine critical energy sector partnerships worth billions of dollars, according to Muhammed Aziz Khan, Chairman of Summit Group. In a detailed economic assessment published in The Business Standard, Aziz Khan emphasized how bilateral energy cooperation between Bangladesh and the US has grown into a multibillion-dollar relationship that now faces substantial risk from punitive trade measures.
“In the past five years, Summit and other Bangladeshi power companies have purchased over $1 billion worth of GE turbines made in the United States,” Aziz Khan wrote, highlighting the significant capital flow from Bangladesh to American manufacturers. “Summit is set to supply Bangladesh with $1 billion per year in US LNG, deepening our energy ties,” he added, pointing to ongoing commitments that could be jeopardized by deteriorating trade relations.
Strategic Energy Infrastructure Development
Over the past decade, Summit Group has established itself as Bangladesh’s largest independent power producer, operating 18 power plants that represent approximately 17% of the country’s private power generation capacity. These facilities utilize advanced technologies, many sourced from American companies like General Electric, whose H-class turbines are deployed in several of Summit’s newest power plants.
Wu Yan Bin, Chief Financial Officer at Summit Power International, has previously highlighted the technological significance of these partnerships: “The GE H-Class turbine that we’ve adopted for our 590 megawatts plant is also configured to burn a mix of natural gas and hydrogen when it eventually becomes cost competitive enough for the country,” he explained. This forward-looking approach demonstrates how US-Bangladesh energy cooperation extends beyond conventional purchasing arrangements to include technological innovation and environmental considerations.
Summit Group also operates Bangladesh’s second floating storage and regasification unit (FSRU) for liquefied natural gas, an essential component of the country’s energy security infrastructure. The FSRU processes approximately 500 million cubic feet of natural gas daily, helping to meet Bangladesh’s growing energy demands. Japanese energy company JERA, which owns a 22% stake in Summit Power International, provides additional technological expertise for these operations.
LNG Procurement and Global Energy Security
The Summit Group chairman’s warnings come at a critical juncture for global energy markets, with LNG prices experiencing significant volatility since Russia’s invasion of Ukraine disrupted traditional supply chains. Bangladesh, which began importing LNG in 2018, has been expanding its regasification capacity to meet growing domestic demand for natural gas, particularly for power generation and industrial applications.
“Summit and other Bangladeshi companies are not simply recipients of American products; we are active partners in a mutually beneficial energy relationship,” Aziz Khan emphasized in his analysis. This relationship includes not only the purchase of physical infrastructure like turbines but also long-term contracts for American LNG, which represents a significant export opportunity for US energy producers.
Ayesha Aziz Khan, Managing Director and CEO of Summit Power International, has previously highlighted the importance of stable energy partnerships for Bangladesh’s continued development. “We need to be able to borrow in US dollars. We need to be able to have our weighted average cost of capital, bring it down so we can offer tariffs that is low and competitive for the people of Bangladesh because the people of Bangladesh cannot afford high tariff,” she noted, emphasizing how international financial relationships directly impact energy affordability.
Climate Commitments and Energy Transition
Beyond immediate commercial relationships, Summit Group has positioned itself as a partner in addressing climate change and facilitating Bangladesh’s energy transition. In 2023, the company announced plans to invest up to $3 billion in clean energy projects, including renewable power generation and more efficient gas-fired plants.
“Bangladesh needs to contribute to global climate goals,” Aziz Khan stated in a recent interview, expressing hope for a future where “each and every aspect of Mother Earth, from its soil to its environment, improves.” Summit’s plans include investments in cross-border renewable energy projects, potentially importing clean electricity from India, Nepal, and Bhutan to supplement Bangladesh’s domestic production.
The proposed tariffs threaten to undermine these initiatives by disrupting the financial frameworks that support long-term infrastructure investments. Wu Yan Bin has noted that Summit Power International “derives 40% of energy generation from clean energy sources by 2040,” a target that would be more difficult to achieve if trade relations deteriorate.
The potential disruption to energy partnerships exemplifies how tariff policies can have consequences far beyond their immediate targets, affecting strategic sectors like energy that contribute to both countries’ economic security and environmental goals.
