Nepal Electricity Authority navigates successful talks on electricity pricing with Bangladesh

KATHMANDU: In a significant breakthrough, Nepal and Bangladesh have reached a preliminary agreement on the price of electricity to be exported from Nepal to Bangladesh. The decision was made during the SAARC energy secretary-level meeting held in Singapore from February 11 to 14, organized by the World Bank.

The negotiation, held in a ‘sideline’ discussion, concluded with an agreement to sell electricity at a rate ranging from 8 to 9 rupees per unit. Although a formal agreement is pending, this development marks a crucial step towards exporting electricity to third countries.

Gopal Prasad Sigdel, the Secretary of the Ministry of Energy, emphasized the importance of not setting the price lower than that offered to India.

He stated that the breakthrough in selling electricity to Bangladesh opens up avenues for future exports and ensures a fair market price. However, Secretary Sigdel clarified that the agreement is yet to be formally reached.

The negotiation process involved a team from the Nepal Electricity Authority, including Executive Director Kulman Ghising and Deputy Executive Director Pradeep Kumar Thike, visiting Bangladesh on February 9.

A meeting was held in Dhaka on February 10 with the Bid Evaluation Committee under the Bangladesh Power Development Board. While positive discussions occurred, the issue of pricing was not resolved during this visit.

The proposed agreement is expected to be for a five-year period, with the electricity export route utilizing the Dhalkebar-Muzaffarpur 400 KV international transmission line through India.

The designated timeframe for electricity export is within June 15 to November 15 each year. The agreement stipulates that Bangladesh will pay the transmission line charges in India, and the Nepal Electricity Authority will receive payment at the Muzaffarpur point in India.

The proposed agreement involves the purchase of 40 megawatts of electricity by Bangladesh from Nepal. The Economic Affairs Committee of the Council of Ministers of Bangladesh approved this proposal on December 20. Bangladesh had requested Nepal to prioritize pricing, leading to the recent negotiations.

The energy trade between Nepal and Bangladesh aligns with Nepal’s broader goals of generating over 28,000 megawatts of electricity in the next 12 years, with plans to export 5,000 megawatts to Bangladesh.

Additionally, there have been discussions about constructing the Sunkoshi third project jointly between Nepal and Bangladesh. The recent secretary-level meeting in May has further solidified the commitment to developing this project.

In a related development, the Indian company GMR has expressed its intention to sell 500 megawatts of electricity generated from Upper Karnali (with a capacity of 900 MW) to Bangladesh. This progress reflects the growing regional cooperation in the energy sector, with the potential for increased electricity trade between neighboring countries.

The energy trade agreement with Bangladesh follows Nepal’s recent long-term agreement with India to export 10,000 megawatts of electricity over the next decade.

Despite challenges, this growing cooperation in the energy sector is seen as a positive development for the stability and economic prospects of the region.