Bangladesh agree to take electricity from Nepal through Indian company

KATHMANDU: Bangladesh is going to take 40 to 50 megawatts of electricity from Nepal. The fourth meeting of the two countries’ Energy Secretary-level ‘Joint Steering Committee’ (JSC) held in Kathmandu on Thursday reached such a consensus.

The authorities of both the countries have also agreed on the issue of tripartite discussions with the concerned bodies there as Indian land has to be used to transport Nepal’s electricity to Bangladesh.

“Bangladesh has said that 40 to 50 megawatts of electricity can be taken from the existing structure,” Energy Secretary Sushil Chandra Tiwari said. However, a tripartite agreement is necessary for this too.

India has authorized NTPC Electricity Trading Corporation (NVVN) for international electricity trading. NVVN is working as an intermediary in the current electricity trade between Nepal and India and India and Bangladesh.

Therefore, the role of NVVN is also sought in the electricity trade between Nepal and Bangladesh. Nepal should use India’s transmission line for electricity trade with Bangladesh. Electricity from Nepal does not go directly to Bangladesh using Indian transmission lines.

A tripartite agreement is necessary for Nepal to provide NVVN and NVVN to provide the same amount of electricity to Bangladesh. Officials of Nepal and Bangladesh have agreed to make such an agreement after Thursday’s meeting.

Since Nepal’s electricity can reach Bangladesh only by using the Indian transmission system, the discussion with NVVN is about to proceed. However, there have been initiatives for such tripartite discussions since the past. But till now no tripartite meeting has been held between Nepal-India-Bangladesh for cooperation in the energy sector.

Energy Secretary Tiwari also said that both sides have initially agreed to make joint investment for the development of Sunkosi-3 hydropower project. From the third meeting of the JSC, both sides also agreed to seek joint investment in two hydropower projects of Nepal, Sunkosi-3 and Khimti-Shivalaya. Since then, the Bangladeshi team has visited Sunkosi-3 project twice.

This project will be constructed by opening an investment company in a joint venture between Nepal Electricity Authority and Power Grid Company of Bangladesh (PGCB). Another interest of Bangladesh is the feasibility study of Khimti-Shiwalaya reservoir hydroelectric project. Nepal has informed Bangladesh that the feasibility study of this project will be completed by December 2023.

Bangladesh is also committed to sign a Power Sale Agreement (PSA) within the next month or two with the Indian company Grandhi Mallikarjuna Rao (GMR), which has been granted an additional 2 years for financial management in the Upper Karnali Hydropower Project. GMR, which has got the license of Upper Karnali, has not been able to manage its finances till now. GMR, which is saying that it will sell 500 megawatts of electricity in Bangladesh, is looking for a way to raise investment by doing a PSA as soon as possible.

It is said that the meeting discussed the possibility of long-term energy trade between the two countries, trade patterns, rules and conditions, transmission system, and the role of regulatory bodies. Officials of both countries have also agreed to draft an agreement between Nepal’s Alternative Energy Promotion Center and Bangladesh’s Sustainable and Renewable Energy Development Authority (SREDA) to cooperate in the field of renewable energy.

Bangladesh is a potential big market for Nepal’s hydropower. During the 18th SAARC conference held in Kathmandu in November 2017, Bangladesh made a proposal for regional electricity trade and cooperation for the first time.

After that proposal, according to the concept of ‘SAARC Framework Agreement for Energy Cooperation’, Bangladesh is cooperating with neighboring countries including Nepal in the energy sector.

Since then, during the ‘South Asia Economic Conference’ held in Dhaka in July 2015, a preliminary agreement was reached between Nepal and Bangladesh to cooperate in the energy sector.

In August 2018, a formal agreement on bilateral cooperation in the energy sector was signed between then Energy, Water Resources and Irrigation Minister Barshman Pun and Bangladesh’s Minister of State for Power, Energy and Minerals Nasrul Hamid.

After the agreement, a joint executive committee at the energy secretary level and a joint technical working group at the joint secretary level of the two countries were formed. The third meeting of JSC held on August 29 last year agreed to create a dedicated transmission line for electricity trading and exchange. The meeting also agreed to build a dedicated transmission line to trade electricity in the long term and discuss it tripartitely, including India. But till now no tripartite meeting has been held between Nepal, India and Bangladesh.