Bangladesh has proposed investing in Nepal’s energy sector through government-to-government (G2G) initiative and in partnership with the private sector.

Speaking at a programme organised to sign the memorandum of understanding (MoU) on energy cooperation between Nepal and Bangladesh, Bangladeshi State Minister for Power, Energy and Mineral Resources Nasrul Hamid said Bangladeshi investors are interested to invest in hydropower and renewable energy in Nepal.

The MoU was signed by Minister of Energy, Water Resources and Irrigation Barsha Man Pun and Bangladeshi State Minister Hamid.

“The Bangladeshi government has epically focused on the area of energy and trade with Nepal for better bilateral cooperation. We can use our knowledge and ideas in Nepal’s hydropower sector,” Hamid added.

Speaking at the programme, Minister Pun said that the bilateral agreement was a milestone in enhancing the power sector cooperation between Nepal and Bangladesh.

“This is a new avenue for enhancing bilateral ties between Nepal and Bangladesh. We will soon set up a joint mechanism of both countries to move towards strengthening cooperation in the power sector,” Pun stated.

According to Minister Pun, as per the MoU, Nepal and Bangladesh will form a power secretary-level joint steering committee (JSC) and joint secretary-level joint working group (JWG) within a month. The JSC and JWG will meet every year and discuss and take forward the issues related to cooperation in the power sector.

“We are happy to announce that the first meeting of JSC and JWG will be held in Nepal within two months at a mutually convenient date,” said Minister Pun.

Nepal and Bangladesh had started discussing bilateral energy cooperation after the power trade agreement (PTA) were signed with India in 2014. Nepal has identified Bangladesh as a prospective market for hydroelectricity, which is a clean and renewable source of energy.

According to Minister Pun, Nepal will soon be able to export 500 megawatts of electricity to Bangladesh. The Bangladeshi government has already signed an agreement to import electricity from the Upper Karnali project, which has installed capacity of 900 megawatts.

For export of electricity to Bangladesh, the prime ministers of Nepal, India and Bangladesh are scheduled to discuss cross-border transmission line to and from Nepal in upcoming Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) meeting, Pun informed.

The BIMSTEC meeting will be held in Kathmandu on August 30 and 31.

Today’s MoU is focused on electricity generation, development of hydroelectricity, cross-border transmission lines, development of efficient human resources in the hydel sector, promotion of G2G and private sector investment, grid connectivity, power efficiency, investment in renewable energy, among others.

Following the ‘SAARC Framework Agreement for Energy Cooperation (Electricity)’ among the SAARC member states in November 2014, Nepal and Bangladesh have seen the prospects of bilateral power cooperation.

“Giving continuous momentum to the annual economic growth of seven to 10 per cent, Bangladesh plans to upgrade its status to a developed nation by 2041. By then, the country’s energy need is estimated to stand at 60,000 megawatts,” said Hamid.

At present, Bangladesh’s energy generation capacity is 16,000 megawatts. The country estimates energy consumption to hover around 24,000 megawatts by the year 2021 and 34,000 megawatts by 2030, Hamid informed.