Nepal, India and Bangladesh set to ink tripartite agreement on cross-border power trade

Published On: July 19, 2024 09:05 AM NPT By: Republica | @RepublicaNepal

Energy ministers from India and Bangladesh expected to visit Kathmandu later this month to seal the tripartite deal

KATHMANDU, July 19: A long-awaited tripartite agreement among Nepal, India and Bangladesh to carry out cross-border electricity trade is likely to be materialized soon.

According to the Ministry of Energy, Water Resources and Irrigation (MoEWRI), Union Power Minister of India, Manohar Lal Khattar, and State Minister of the Ministry of Power, Energy and Mineral Resources of Bangladesh, Nasrul Hamid, will be visiting Nepal in the last week of July. “Nepal’s Energy Minister Deepak Khadka will be hosting a meeting on July 28. The meeting is set to ink the tripartite agreement for electricity trade,” said Nabin Raj Singh, spokesperson for the MoEWRI.

Singh informed Republica that the joint-secretary and secretary-level meetings of Nepal and Bangladesh will be held on July 29-30.

Bangladesh has been consistently showing an interest in purchasing electricity from Nepal. This agreement, already preceded by an initial signing between Nepal and Bangladesh, is poised to enable Bangladesh to import electricity from Nepal through Indian transmission lines.

Under the proposed terms, Nepal will export 40 megawatts of electricity annually to Bangladesh during the monsoon season, spanning five months each year. This arrangement is expected to come into effect this year, with the finalization of the pending issue during the upcoming ministerial meeting.

Kulman Ghising, executive director of Nepal Electricity Authority (NEA), has confirmed the completion of all necessary procedures to commence electricity exports. Once operational, Nepal anticipates earning 6.40 cents per unit of electricity exported, reinforcing its position as a key player in regional energy trade initiatives.

In the proposed agreement, Bangladesh will be purchasing 40 MW of Nepal-produced electricity daily from June 15 to November 15 every year. In aggregate, Bangladesh will get 28,800 MWh of electricity per month and Rs 144,000 MWh of electricity in five months of the peak production season.

Based on the proposed rate of the electricity tariff, Nepal will earn a total of US $9.216 million by selling electricity to Bangladesh in the five-month peak season.

Bangladesh Power Development Board in 2019 signed a power purchase agreement with the NEA, aiming to import 500 MW of electricity produced by the Upper Karnali Hydropower Project in Nepal. Later in August 2022, Nepal agreed to export 40 MW of electricity to Bangladesh in the initial stage by using the high-voltage Baharampur-Bheramara cross-border power transmission line.

In addition, Bangladesh is also keen about investing in the 683 MW Sunkoshi III Hydropower Project. For this purpose, the country has agreed in principle to involve India, making the project a trilateral venture.

Bangladesh, in its strategic plan, aims to purchase 9,000 MW of electricity from Nepal by 2040. The South Asian country, which is in pursuit of clean energy, has expressed its interest in investing in some important projects in Nepal as well.