Positive talks on electricity sales with Bangladesh, deal expected soon

Kathmandu: The Nepal Electricity Authority (NEA) and the Bangladesh Power Development Board (BPDB) are progressing positively in their discussions on electricity sales, with an anticipated agreement within this year.

In the backdrop of increased electricity production in Nepal, especially from hydropower projects, both parties are keen on fostering a mutually beneficial deal. The current round of talks builds upon the momentum gained from the agreement last year, allowing Nepal to export electricity to Bangladesh for the next two years.

Kulman Ghising, the Managing Director of NEA, led a delegation to Dhaka for discussions with BPDB. Ghising expressed optimism about the ongoing negotiations, highlighting the potential for a swift agreement. He mentioned that the comprehensive discussions, including detailed proposals, are aimed at finalizing terms for the export of electricity.

“We have presented a proposal to BPDB regarding the rates at which we plan to sell electricity to Bangladesh. We are hopeful that the negotiations will lead to a positive outcome,” stated Ghising.

The negotiations focus on determining tariff rates for the electricity to be supplied to Bangladesh. The NEA proposed rates between Rs 8.96 and Rs 9.28 per unit, subject to further bilateral negotiations. The aim is to strike a balance that benefits both countries and promotes a sustainable and economically viable arrangement.

The mechanism for the transmission of electricity involves India’s NTPC Vidyut Vyapar Nigam Ltd. (NVVN), designated as the nodal agency by the Indian government.

As per the preliminary trilateral agreement, Nepal will export electricity to the Nepal-India border, from where it will be transmitted to Bangladesh through the 400 kV Dhalkebar-Muzaffarpur cross-border transmission line and related infrastructure built in India.

Bangladesh, which has already initiated a tender process for the transmission of electricity, is set to purchase an initial 40 MW of electricity from Nepal. This marks a significant step in fulfilling the commitment made during Prime Minister Pushpa Kamal Dahal’s visit to India, where the Indian side assured facilitation of electricity export from Nepal to Bangladesh.

Beyond the initial phase, Bangladesh has outlined ambitious plans to import 9,000 MW of electricity from Nepal by 2040. The move aligns with Bangladesh’s strategic goals of securing clean energy sources to meet its growing demand and sustainability objectives.

In addition to electricity sales, Bangladesh has expressed interest in investing in key hydropower projects in Nepal. The country is eyeing a 500 MW share from the 900 MW Upper Karnali Hydropower Project and has signaled willingness to participate in the 683 MW Sunkoshi 3 Hydropower Project, potentially involving India in a trilateral venture.

The expected deal with Bangladesh would mark a significant milestone for Nepal, diversifying its power trading partners. Since June 2022, Nepal has been successfully exporting electricity to India through the Indian Energy Exchange, contributing to a substantial boost in revenue.

The anticipated agreement with Bangladesh holds the potential to further strengthen Nepal’s position in the regional electricity market and foster economic cooperation.