Nepal advances electricity export ambitions: finalizes deal with Bangladesh

KATHMANDU: In a significant stride towards fulfilling its vision of exporting domestically produced electricity, Nepal is on the brink of sealing a groundbreaking deal with Bangladesh.

A Nepali delegation, spearheaded by Kulman Ghising, Managing Director of the Nepal Electricity Authority (NEA), embarked on a crucial mission to Bangladesh on Wednesday to finalize tariff rates for the electricity exchange.

“We will finalize the tariff rates at which we will be selling electricity to Bangladesh,” stated Ghising. The initiative gained momentum following assurances from India during Prime Minister Pushpa Kamal Dahal’s visit in May-June last year, where the Indian government pledged to facilitate the export of electricity from Nepal to Bangladesh. In the initial phase, Bangladesh is set to procure 40 MW of electricity from Nepal.

Bangladesh has already initiated the process by issuing a tender to transmit electricity from Nepal to its territory.

Last month, Bangladesh submitted a draft request for proposal, seeking the NEA’s input on setting tariffs for the electricity exchange. In response, the NEA proposed rates ranging from Rs 8.96 to Rs 9.28 per unit, with finalization expected through bilateral negotiations.

The transmission of Nepal’s electricity to Bangladesh will be facilitated through India’s NTPC Vidyut Vyapar Nigam (NVVN), designated as the nodal agency by the Indian government.

As per the preliminary trilateral agreement, Nepal will supply electricity to the Nepal-India border, with further transmission to Bangladesh via the 400 kV Dhalkebar-Muzaffarpur cross-border transmission line and related infrastructure in India. Bangladesh will bear the wheeling charge and the cost of electricity losses.

Bangladesh, aiming to purchase 9,000 MW of electricity from Nepal by 2040, has expressed interest in investing in key projects in Nepal. The country seeks to acquire 500 MW of electricity from the 900 MW Upper Karnali Hydropower Project, developed by the Indian GMR company.

Additionally, Bangladesh is keen to invest in the 683 MW Sunkoshi 3 Hydropower Project, potentially making it a trilateral venture involving India.

Once finalized, the deal with Bangladesh will mark Nepal’s second power trading partnership. Since June 2022, Nepal has been successfully selling electricity to India through the Indian Energy Exchange.

In the period from June to November 2023, Nepal exported 1.7371 billion units of electricity at Rs 8.77 per unit, generating revenue of Rs 15.23 billion—a significant increase from Rs 8.44 billion in the preceding year. Nepal’s foray into power trade continues to strengthen its economic standing and regional collaborations.