Nepal’s Tripartite Agreement to Sell 40 MW of Electricity to Bangladesh Postponed

KATHMANDU: Nepal’s tripartite agreement to sell 40 megawatts of electricity to Bangladesh has been postponed due to widespread protests in Bangladesh against special reservations in government services. This delay affects the scheduled agreement between Nepal, India, and Bangladesh, which was initially set for July 28.

Spokesperson Navin Raj Singh of the Ministry of Energy, Water Resources, and Irrigation stated that Bangladesh has sent a letter requesting to reschedule the agreement. “They have mentioned that they will confirm a new date later,” he said. Previously, the electricity purchase agreement was to be signed in the presence of Nepal’s Energy Minister Deepak Khadka, India’s Power Minister Manohar Lal, and Bangladesh’s State Minister for Power, Energy, and Mineral Resources Nasrul Hamid. A secretary-level meeting between Nepal and Bangladesh was also scheduled to take place in Pokhara soon after.

The protests in Bangladesh erupted over special reservations in government services for the children and relatives of participants in the 1971 independence movement. Violent clashes during the protests have resulted in over 150 deaths. Despite the Supreme Court of Bangladesh abolishing the special reservation law on Tuesday, the situation has not yet normalized.

The Nepal Electricity Authority (NEA) has an agreement to sell electricity to Bangladesh during the five months of the rainy season, from June 15 to November 15 each year. NEA will export a total of 144,000 megawatt hours of electricity annually. The authority will earn $0.064 per unit (approximately NPR 8.55 at Wednesday’s exchange rate), amounting to $9.216 million (NPR 1.23 billion at Wednesday’s exchange rate) in revenue over five months.

The electricity exported to Bangladesh will pass through the first cross-border 400 kV transmission line between Nepal and India, from Dhalkebar to Muzaffarpur. NEA will receive the payment for the electricity at the Muzaffarpur point in India, meaning the meter for the exported electricity will be at Muzaffarpur. NEA will bear the technical transmission loss from Dhalkebar to Muzaffarpur. From Muzaffarpur, the electricity will be transmitted to Bangladesh through the Behrampur (India)-Bheramara (Bangladesh) 400 kV transmission line.

NEA is preparing to export electricity produced from the 25 MW Trishuli and 22 MW Chilime hydropower projects, both of which have received approval for electricity export to India. The Bangladesh Power Development Board (BPDB) had called for tenders on December 31, 2023, to purchase 40 MW of electricity from Nepal for five years under the tripartite agreement. NEA had submitted the bid documents, including the proposed rate, in mid-February. Subsequently, NEA’s team and the BPDB’s bid evaluation committee held discussions in Dhaka on February 21.

Nepal had proposed a price of $0.067 per unit of electricity, asserting that it would not sell at a lower rate than what it sells to India. However, after bilateral discussions during the SAARC Energy Secretary-level meeting organized by the World Bank in Singapore, Bangladesh agreed to purchase electricity at $0.064 per unit. Although the price was agreed upon, Bangladesh’s Cabinet Committee on Public Purchase (CCGP) only approved the price of electricity imported from Nepal on June 12.

BPDB informed NEA of the acceptance of the bid by sending a notice on July 7. NEA also provided a written notice to BPDB confirming the acceptance. BPDB then sent the draft electricity sale agreement to NEA, which NEA responded to with a letter inviting BPDB for the agreement signing on July 11.

The Economic Affairs Committee of Bangladesh’s Cabinet had given an in-principle approval to import 40 MW of electricity from Nepal on December 6, 2023. Accordingly, Bangladesh sent a letter to Nepal prioritizing the price for the sale proposal, which NEA sent in mid-February.

**Keywords:** Nepal electricity export, Bangladesh electricity import, tripartite agreement, Nepal Electricity Authority, cross-border transmission line, hydropower projects, electricity purchase agreement, electricity trade Nepal India Bangladesh, energy sector Nepal, Dhalkebar-Muzaffarpur transmission line, SAARC energy trade, World Bank energy meeting, electricity pricing Nepal, BPDB electricity agreement.