After 6 years of homework, the Nepal-Bangladesh Power Sales Agreement (PSA) will take some time to be implemented. A tripartite agreement was reached last Thursday (October 3) to sell Nepal’s electricity to Bangladesh using India’s grid.

But the Nepal Electricity Authority said that it will take some time as the technical process has not been completed, including the need to approve the name of the hydropower project to be sold to Bangladesh from the Central Electricity Authority of India.

The name of the project to sell electricity to Bangladesh has been sent to the Central Electricity Authority of India for approval, said Kulman Ghising, the managing director of the authority. “We have already sent it to the Central Electricity Authority of India for approval before Dasain,” he said. We are requesting to give consent soon.’

The authority has said that it will sell the electricity produced by the 25 MW Trishuli and 22 MW Chilime hydropower project built through its subsidiary company to Bangladesh. 25 MW Trishuli and 22 MW Chilime hydropower projects have already received approval to sell electricity in the Indian market. Nepal will have to get approval from India again to export electricity from these projects to Bangladesh, which has been approved for sale in India. Therefore, the authority says that it is in the process of approving the name of the project.

Ghising said that as soon as India approves the name of the project to export electricity to Bangladesh, electricity sales will start. Previously, the electricity trade was only with India, after the process is completed, the energy trade will also start with the third country, Bangladesh. Ghanshyam Bhandari, Nepal’s ambassador to Bangladesh, said that although an agreement has been reached between Nepal, India and Bangladesh, it is still in the technical process. He said that the sale of electricity to Bangladesh will start as soon as the technical process is completed.

According to the agreement, the authority will sell electricity to Bangladesh from June 15 to November 15 every year during the rainy season. According to the agreement, Nepal will be allowed to sell electricity only until the end of October this year. If India does not give approval within this month, Bangladesh will have to wait for another year to sell electricity. But the executive director of the authority, Ghising, has been saying that he will sell electricity to Bangladesh even if it is one day within this year.

The authority has said that 1 lakh 44 thousand megawatt hours of electricity will be exported in a total of 5 months. According to the authority, the rate of 6.40 US cents per unit will generate 92 million 16 thousand US dollars in 5 months. This is the first time that Nepal is going to sell electricity in dollars. Earlier, transactions with India have been done in Indian rupees (Bharu).

The authority will get the price of electricity exported to Bangladesh at the Muzaffarpur point in India. In other words, the meter of electricity exported to Bangladesh will be in Muzaffarpur. The authority will bear the technical leakage of the transmission line from Dhalkebar to Muzaffarpur. Chandan Kumar Ghosh, spokesperson of the Authority, said that when electricity is sold to Bangladesh, the country will earn 330 million rupees per month. When it reaches the border of Bangladesh, the price of electricity will reach about 7.6 cents per unit.

The agreement to export electricity from Nepal to Bangladesh became possible after 6 years of homework. Nepal and Bangladesh signed a memorandum of understanding on energy cooperation on 075 July 25. The agreement was signed on October 17 after various stages of meetings, discussions and the procurement process with Bangladesh were completed.

Bangladesh has a total of 24,911 megawatts of electricity, but the share of hydroelectric power is only 1 percent, according to the Energy Scenario of Bangladesh (2022-23), a report published by the Energy and Mineral Resources Division of the country (in February 2024). According to the report, the share of renewable energy is only 2 percent i.e. 459 megawatts in the financial year 2022-23. In Bangladesh’s total electricity production, hydropower accounts for 1 (230 MW), renewable energy 2 (459 MW), coal 11 (2692 MW), import 11 (2656 MW), diesel 4 percent (1010 MW), furnace oil 26 percent (6492 MW). And the share of natural gas is 45 percent (11372 MW),” the report states. This also shows the urgent need of renewable energy in Bangladesh.

How does Nepal’s electricity reach Bangladesh?

Although the geographic distance (air distance) is only about 22 km, there is no transmission line between Nepal and Bangladesh to export electricity. Therefore, India will have to give way to sell electricity to Bangladesh. Therefore, a tripartite agreement has been signed between Nepal, India and Bangladesh to sell 40 megawatts of electricity. In the absence of a ‘dedicated’ transmission line between Nepal and Bangladesh, Nepal’s electricity has to travel more than 500 kilometers.

The international transmission line between Nepal and India will reach 400 KV from Dhalkebar to Muzaffarpur, India. It will reach Behrampur in India through 220 kV and 400 kV transmission lines from Muzaffarpur substation in India. Then it will reach Bangladesh through the international transmission line of India and Bangladesh. Nepal’s electricity will reach Vedamara in Bangladesh through India’s Behrampur transmission line.

Does Nepal’s electricity reach Bangladesh?

Dhalkebar(Nepal)–Muzaffarpur(India)–Behrampur(India)–Bhedamara(Bangladesh) 400KV transmission line. But Nepal’s electricity will not reach Bangladesh. In other words, the power of the Trishuli and Chilime hydropower projects that the authority is preparing to send will not reach Bangladesh. In addition to the electricity sold to India, Nepal will send an additional 40 MW to the Indian system. India will send 40 MW to Bangladesh through this system. Chandan Kumar Ghosh, spokesperson of the Authority, said that after joining the

system, it cannot be distinguished where the electricity reaches Nepal or India in Bangladesh. “We will send an additional 40 MW to India according to the medium-term and competitive market,” said Ghosh, “After we send, India will give 40 MW to Bangladesh. After mixing in the grid, the electricity sent to Bangladesh belongs to Nepal and cannot be separated from that produced in India.’

Since Nepal started trading electricity with India from October 2018, it has so far received permission to sell 941 megawatts of electricity from 28 hydropower projects. According to the mid-term agreement, Nepal has received permission to sell 360 MW of electricity. Similarly, the remaining day-ahead and real-time markets have been allowed for sale. A mid-term agreement has been signed with Bangladesh to sell 40 megawatts of electricity.

Source : Ekantipur (Translation )