The interim government of Bangladesh has also shown interest in importing 40 megawatts of electricity from Nepal. During the tenure of then-Prime Minister Sheikh Hasina, an agreement was set on July 28 to purchase and sell 40 megawatts of electricity among Nepal, India, and Bangladesh. However, due to political developments in Bangladesh, the agreement was postponed, and Bangladesh sent a letter requesting a delay in the mid week of August.

After protests against special reservations in government services intensified in Bangladesh, Sheikh Hasina resigned and left the country on August 6. Under her leadership, the process of purchasing 40 megawatts of electricity to be transported from Nepal to Bangladesh via India had been advancing. However, with Hasina leaving the country, the future of the 40-megawatt electricity purchase agreement is now uncertain.

Currently, Mohammad Yunus, the head of the interim government of Bangladesh, has shown support for importing electricity from Nepal. Although all the paperwork had already been completed, only the agreement among the three countries was pending. The Ministry of Energy, Water Resources, and Irrigation has reported that informal discussions are taking place to finalize the 40-megawatt electricity purchase and sale agreement in September. Even though no formal letter has been received yet, spokesperson Chiranjeevi Chataut clarified that discussions are ongoing through various channels to set a date for the 40-megawatt electricity purchase and sale agreement.

On July 28, a date had been set for the agreement among the three countries. However, it was halted due to political developments in Bangladesh,” Chataut said. “The new government in Bangladesh will also need to be informed about this. We are currently working to find a suitable time for the agreement that works for India, Bangladesh, and Nepal.” He added that discussions are ongoing to set a date that is convenient for all three countries.

“We are discussing to set a date for the electricity purchase and sale agreement,” Chataut said. “Once we find a date that is suitable for all three countries, we will finalize it.” He mentioned that efforts are being made to finalize the agreement in September, even if it means starting the sale of electricity to Bangladesh within two months this year. “Discussions are taking place through phone calls, social media, and even with the Nepali ambassador to Bangladesh regarding the agreement date,” he added.

Previously, it was announced that the electricity purchase and sale agreement would be signed in the presence of Nepal’s Energy Minister Deepak Khadka, India’s Power Minister Monohar Lal, and Bangladesh’s State Minister for Energy and Mineral Resources Nasrul Hamid. The tripartite agreement will be between the Nepal Electricity Authority, India’s NTPC Vidyut Vyapar Nigam (NVVN), and Bangladesh’s Power Development Board (PDB). The agreement stipulates that the Authority will sell electricity to Bangladesh during the monsoon season, specifically from June 15 to November 15 each year.

Each year, a total of 144,000 megawatt-hours of electricity will be exported over a period of five months. The Authority will earn 6.40 US cents per unit of electricity sold to Bangladesh (approximately 8.55 Nepalese rupees, according to Wednesday’s exchange rate). The Authority has stated that this will result in an income of 9.216 million US dollars (approximately 1.23 billion Nepalese rupees, according to Wednesday’s exchange rate) over the five-month period.

The price of electricity exported to Bangladesh via the first international transmission line between Nepal and India, from Dhalkebar to Muzaffarpur (400 kV), will be received by the Authority at the Muzaffarpur point in India. In other words, the meter for the electricity exported to Bangladesh will be located in Muzaffarpur. The Authority will bear the technical losses of the transmission line from Dhalkebar to Muzaffarpur. From Muzaffarpur, the electricity will be transmitted to Bangladesh via the 400 kV transmission line from Behrampur (India) to Bhedamara (Bangladesh).

The Authority is preparing to export electricity to Bangladesh from the 25-megawatt Trishuli project, built with Indian grant funding and owned by the Authority, and the 22-megawatt Chilime Hydropower Project, built through its subsidiary. Both of these projects have already received approval for electricity export to India.

On January 1, 2024, the Power Development Board (PDB) issued a tender for the purchase of 40 megawatts of electricity from Nepal for five years, in accordance with the tripartite agreement among Bangladesh, India, and Nepal. The Authority submitted the tender documents, including the rates for the electricity to be sold, in the prescribed format during the mid week of January. Following this, a meeting was held in Dhaka on February 22, 2024, between the Authority’s team and the tender evaluation committee under the PDB.

Nepal had proposed a price of 6.70 US cents per unit of electricity. Since Nepal insisted on not providing a lower price than what it sells to India, an agreement on the price could not be reached during the meeting. However, later, during a bilateral discussion at the SAARC Energy Secretaries’ meeting organized by the World Bank in Singapore, Bangladesh agreed to purchase the electricity at a slightly reduced price of 6.40 US cents per unit, as proposed by Nepal.

Even though an agreement was reached on the price, it was only on June 1, that Bangladesh’s Cabinet Committee on Public Procurement (CCGP) approved the price for the electricity to be imported from Nepal. After evaluating the submitted tender documents and obtaining approval from the relevant authorities, the Power Development Board (PDB) informed the Authority on July 7 of its intention to accept the tender. The Authority also sent a written notice to the PDB confirming the acceptance of the tender. Shortly thereafter, the PDB sent a draft of the electricity sale agreement to the Authority. Upon receiving the draft, the Authority set a date for the agreement and sent an invitation letter to the PDB on December 6.

On December 5, 2023, Bangladesh’s Cabinet Committee on Economic Affairs granted preliminary approval for the proposal to import 40 megawatts of electricity from Nepal. Accordingly, Bangladesh sent a letter to Nepal prioritizing the price and requesting a sales proposal. The Authority submitted the sales proposal during the second week of January.

Source: Kantipur