Long-Awaited Tripartite Agreement on Cross-Border Electricity Trade Nears Finalization

KATHMANDU: A landmark tripartite agreement among Nepal, India, and Bangladesh to facilitate cross-border electricity trade is expected to be finalized soon. This significant development was confirmed by the Ministry of Energy, Water Resources, and Irrigation (MoEWRI) of Nepal.

Union Power Minister of India, Manohar Lal Khattar, and State Minister of the Ministry of Power, Energy, and Mineral Resources of Bangladesh, Nasrul Hamid, are scheduled to visit Nepal in the last week of July. “Nepal’s Energy Minister Deepak Khadka will host a meeting on July 28, where the agreement for electricity trade will be signed,” said Nabin Raj Singh, spokesperson for the MoEWRI.

Following the ministerial meeting, joint-secretary and secretary-level meetings between Nepal and Bangladesh are planned for July 29-30.

Bangladesh has been consistently keen on purchasing electricity from Nepal. This tripartite agreement, building on an initial bilateral agreement between Nepal and Bangladesh, will enable Bangladesh to import electricity from Nepal via Indian transmission lines.

Under the proposed terms, Nepal will export 40 megawatts of electricity to Bangladesh annually during the monsoon season, which spans five months each year. This arrangement is set to commence this year, pending finalization during the upcoming ministerial meeting.

Kulman Ghising, Executive Director of Nepal Electricity Authority (NEA), confirmed that all necessary procedures for the electricity exports are complete. Nepal expects to earn 6.40 cents per unit of electricity exported, solidifying its role in regional energy trade initiatives.

Bangladesh will purchase 40 MW of electricity daily from Nepal from June 15 to November 15 each year. This equates to 28,800 MWh of electricity per month and a total of 144,000 MWh over the five-month peak production season. Based on the proposed tariff, Nepal will earn approximately USD 9.216 million by selling electricity to Bangladesh during this period.

In 2019, the Bangladesh Power Development Board signed a power purchase agreement with the NEA to import 500 MW of electricity from Nepal’s Upper Karnali Hydropower Project. In August 2022, Nepal agreed to export 40 MW of electricity to Bangladesh initially through the high-voltage Baharampur-Bheramara cross-border power transmission line.

Moreover, Bangladesh has expressed interest in investing in Nepal’s 683 MW Sunkoshi III Hydropower Project. The project is set to be a trilateral venture with India’s involvement. Strategically, Bangladesh aims to purchase 9,000 MW of electricity from Nepal by 2040 and is pursuing clean energy investments in Nepal.

This agreement marks a significant milestone in regional cooperation and energy trade, fostering economic growth and energy security among the three nations.