Historic multilateral accord: Nepal to export 40 MW of electricity to Bangladesh

KATHMANDU: Continuing the series of discussions and previous agreements, a pivotal multilateral accord has been achieved to facilitate the export of 40 megawatts of electricity from Nepal to Bangladesh.

An earlier Nepal-India secretary-level meeting in Mount Abu, India, set the groundwork for this agreement by approving the transmission of up to 50 megawatts of electricity from Nepal to Bangladesh via India.

The Ministry of Energy, Water Resources, and Irrigation has confirmed that a tripartite agreement involving Nepal, India, and Bangladesh has been established for electricity export.

The initial phase will witness the export of 40 megawatts of electricity from Nepal. While this amount might appear modest in terms of sheer quantity, the significance of Nepal’s electricity export to neighboring countries is being recognized from a strategic perspective.

The Nepal Electricity Authority has also greenlit the Indian nodal agency NVVN for the task of exporting electricity to Bangladesh. NVVN will be responsible for transferring electricity from Nepal to Bangladesh.

Prabal Adhikari, Director of the Electricity Trade Department within the authority, stated that the essential groundwork for electricity export has been accomplished, and although some matters remain unresolved, they are on the brink of resolution.

An agreement was solidified through email exchanges and is set to be formally signed by officials from both nations in person. Decisions regarding which project’s electricity will be allocated to Bangladesh, the pricing per unit, and the transmission fee to be paid to the Indian company are still in deliberation.

In the Mount Abu meeting in India, discussions revolved around directing the electricity generated from the Likhu-4 power project (52.4 MW) to Bangladesh.

Ganesh Karki, Chairman of the Independent Energy Producers Association of Nepal (IPAN), stressed that, at present, the opening of avenues for such trade is of greater significance than the precise quantum of electricity earmarked for Bangladesh.

Looking ahead, Bangladesh has outlined plans to import 9,000 megawatts of electricity from Nepal by 2040 as part of its strategic blueprint. Currently, India is the primary electricity exporter to Bangladesh.

Bangladesh, in its pursuit of clean energy sources, has also expressed keen interest in investing in key projects within Nepal.

The fifth meeting of the Nepal-Bangladesh Energy Secretary-Level Joint Directorate Committee held on May 2 in Bangladesh affirmed the decision to export electricity.

This meeting featured substantial discussions on the establishment and management of international transmission lines, the development of the Sunkoshi third hydropower project, and the international electricity import and export framework.

The same meeting ratified the prompt signing of a power sale agreement between the authorities, NVVN, the Power Development Board of India, and Bangladesh for the export of 40 MW of electricity. In Bangladesh, a committee is mandated to determine the purchase rate of electricity from Nepal.

Nepal has set an aim to conclude all necessary procedures by the second week of August, with plans to initiate the export process thereafter. The Ministry has indicated that electricity generated during the rainy season will serve as an initial “token” export, since exports will not be feasible during the winter season.

Meanwhile, preparatory work is underway, jointly with Bangladesh, for the construction of the Sunkosi third multi-purpose project with a capacity of 683 megawatts.

A meeting between energy secretaries from Nepal and Bangladesh in May last year resulted in an agreement to collaboratively undertake project development within six months.

Bangladesh is poised to acquire 500 megawatts of electricity from the Upper Karnali hydropower project. However, financial management issues have hindered progress, as the Indian GMR Energy Company, the project’s promoter, has encountered difficulties in securing funds.