Intensive discussion between Nepal and Bangladesh for electricity trade agreement

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Recently, there has been a surge in discussions regarding the electricity trade agreement between Nepal and Bangladesh, which has faced delays due to recent political changes in Bangladesh.


On August 30, Bangladesh's Ambassador to Nepal, Salahuddin Noman Chaudhary, met with Nepal's Energy, Water Resources, and Irrigation Minister, Deepak Khadka, to discuss the electricity trade. This issue was also addressed during a meeting between Nepal's Ambassador to Bangladesh, Ghanshyam Bhandari, and the interim government leader, Muhammad Yunus, on Tuesday. The agreement was initially slated for signing last June, but despite preparations at the Energy Secretary-level meetings of both countries, it was not finalized.

The agreement, which had been prepared with the participation of the energy ministers of Nepal, India, and Bangladesh, was postponed at the last moment due to political upheavals in Bangladesh. The Ministry of Energy, Water Resources, and Irrigation has indicated that the interim government of Bangladesh is actively engaged in discussions and is taking necessary steps regarding electricity supply.


In his meeting with Minister Khadka, discussions covered various aspects of energy cooperation between Nepal and Bangladesh. Minister Khadka highlighted Nepal's significant hydroelectric potential and Bangladesh's growing energy needs, emphasizing that the meeting would enhance cooperation between the two countries.


During the same meeting, a secretary and joint secretary-level discussion took place to address key issues such as large hydropower projects, the Indian side’s agreement on the international transmission line, and the commencement of electricity trade.


Minister Khadka noted that a historic tripartite electricity trade agreement between the Nepal Electricity Authority (NEA), Bangladesh Power Development Board, and the Electricity Trading Corporation of India is set to enable Nepal to export electricity to Bangladesh via Indian transmission lines during the rainy season. This marks a significant step in the electricity trade between the two countries.


For the Sunkoshi Reservoir Hydropower Project, which has a capacity of 680 MW, the process to sign a joint venture agreement between the NEA and Bangladesh Power Development Board is advancing. Minister Khadka stressed the need for necessary initiatives from the Bangladesh government and its embassy.


Ambassador Chaudhary mentioned Bangladesh’s intent to finalize a 40 MW electricity purchase agreement soon and expressed optimism about Bangladesh’s support for power generation, trade, and transmission development.


The fifth meeting of the Joint Director Committee, which is comprised of Energy Secretaries from both countries, finalized the agreement to establish a joint venture between the Sunkoshi Third Hydropower Project Construction and Development Authority and the Power Development Board of Bangladesh on May 2, 2080. During this meeting, it was also decided that the technical team would explore potential international transmission line options to facilitate electricity trade between the two nations.


The initial meeting of this energy secretary-level mechanism took place in Kathmandu on November 17-18, 2075. During this session, preliminary discussions were held regarding the facilitation of Nepalese electricity exports to Bangladesh.


On July 25, 2075, an agreement to foster bilateral cooperation in the electricity sector was signed by Barshman Pun, then Minister of Energy, Water Resources, and Irrigation, and Nasrul Hamid, the Minister of State for Electricity, Energy, and Mineral Resources of Bangladesh. Since the signing of this agreement, meetings at the energy secretary level between the two countries have been conducted on a regular basis.

Currently, the Authority is focused on exporting electricity exclusively to India, having sent 18,164 megawatt-hours to India just on Tuesday. The domestic demand within Nepal stands at 2,126 megawatts.

The NEA has announced that it will sell 40 megawatts of electricity to Bangladesh for six months during the rainy season over the next five years at a rate of 8.17 taka (approximately nine rupees 30 paise) per unit.


The discussion about this 40 MW agreement was also part of Ambassador Bhandari’s meeting with Bangladesh's interim government leader Yunus.


Electricity will be transmitted to Bangladesh from Indian territory via the Dhalkebar-Muzaffarpur international line, which currently facilitates Nepal-India electricity trade. The NEA will receive the fixed price at the Muzaffarpur point in India, and any technical issues with the transmission line will be managed by the authority.


Electricity will be delivered to Bangladesh via the 400 KV Bahrampur-Bhermara transmission line in India. While this represents a symbolic success for Nepal, the government views it as a crucial step towards regional electricity trade. The NEA will provide electricity to the Indian company NVVN, which will then deliver it to Bangladesh.


The NEA has announced plans to export electricity from the Chilime and Trishuli hydropower plants to Bangladesh. Additionally, Bangladesh has pledged to import 9,000 megawatts of electricity from Nepal by 2040.

Nepal and India have signed a long-term agreement to export 10,000 megawatts of electricity over the next decade. Exporting electricity to Bangladesh would also hold strategic significance. Although a tripartite agreement was prepared in July with the presence of energy ministers from all three countries, it was postponed due to Bangladesh's political changes.


A bilateral agreement on energy cooperation between Nepal and Bangladesh was finalized in 2075. The NEA forecasts that selling electricity during the rainy season could generate an income of Rs. 1.23 billion.


Bangladesh has also shown interest in importing 500 MW of electricity from the 900 MW Upper Karnali Hydropower Project, which is being developed by the Indian company Grandhi Mallikarjun Rao (GMR).


The electricity exchange issue between Nepal and Bangladesh has been frequently discussed, including in private sector forums.

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