Interim govt of Bangladesh approves decision to import 40 MW of electricity from Nepal

KATHMANDU, Sept 16: The Interim Government of Bangladesh has approved the initiative to import 40 MW of hydropower from Nepal. This project, which was operated during the then Sheikh Hasina-led government in mid-June, has been continued by the interim government.

Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan approved the import of 40 megawatts of hydropower from Nepal to Bangladesh on Monday. According to the media of Bangladesh, the Finance Division has objected to the transmission line charges imposed by the Indian government on the import of electricity.

Sources also revealed that a tripartite agreement is needed to import electricity from Nepal and could pave the way for a new era of energy cooperation.

The tripartite agreement was earlier expected to be signed this September. But the changing situation in Bangladesh and complications related to the missing files are now expected to cause delay.

Aside from this, the National Revenue Board (NRB), Bangladesh Bank (BB), and the Financial Institutions Division have not yet provided their opinions while only the Economic Division has responded so far.

The procurement agreement will be finalized and sent to the Ministry of Law for review after receiving opinion from all the relevant bodies. Following the review process completed, a tripartite agreement will be signed.

The price of electricity to be delivered to Bangladesh through the Dhalkebar-Muzaffarpur substation in India has been set at 6.40 US cents or Rs 7.32 per unit. Additionally, the cost per unit, including the trading margin of India's NTPC Vidyut Vyapar Nigam Limited (NVVN) and transmission line charges, has been fixed at Rs 8.17.

The payment of 40 megawatts of hydropower from Nepal to Bangladesh will be made in both dollars and rupees. The cost of hydropower and transmission line charges will be paid in dollars, while the trading margin will be settled in rupees.

If there is an agreement to import hydropower from Nepal, the Interim Government of Bangladesh expects to open the door for Bangladesh's cross-border trade, to provide more opportunities for electricity import and other bilateral trade with Nepal and Bhutan. 

Bangladesh will need to pay India for the transmission line and other related charges for importing electricity.

According to the agreement, the tax regulations of Bangladesh, India and Nepal apply to the 40 MW of hydropower to be transported to Bangladesh. If India changes its tax policies during the import-export process, the increase in cost will be shared equally between Bangladesh and India on a 50-50 basis.

Conversely, if a tax policy change in Bangladesh or Nepal affects costs, the country concerned will bear the entire burden. India will not assume any responsibility in such cases.