Bangladesh delegation in Nepal to sign contract to import 40 MW electricity

A Bangladesh delegation today (30 September) went to Nepal to sign a contract to import 40 MW of electricity from the Himalayan nation.

Senior Secretary of the Power Division Habibur Rahman will be leading the 8-member delegation where they are expected to sign the contract on 4 October.

Sources at the Power Division said there will be a tripartite agreement between Bangladesh, Nepal and India as the electricity will be imported through the Indian territories.

Earlier, Bangladesh's Cabinet Committee on Government Purchase (CCGP) approved a proposal of the state-owned Bangladesh Power Development Board (BPDB) to import the bulk electricity from Nepal.

As per the proposal, the tariff for electricity was set at 6.40 US cents per kilowatt hour (energy price at Muzaffarpur Substation, India) plus 0.0595 Indian Rupee per kilowatt hour for Indian Contractor's trading margin and also transmission charge to be fixed by the Indian Central Electricity Regulatory Commission (CERC).

Calculating such tariff structure, a top official of the BPDB said that under the proposed deal, each unit of electricity from Nepal will cost Tk8.50.

Officials of the BPDB also mentioned that the tariff would be much lower if Bangladesh would have been able to import electricity from Nepal directly.

But instead of that direct import, Bangladesh will now have to import the electricity through an Indian trading firm NVVN and also through the Indian grid.

"There is only a 26-km transmission line that goes through Indian Territory. If Bangladesh was allowed to build this 26-km transmission line at our own cost, the tariff of Nepali electricity would be below Tk7," he told UNB.

Bangladesh has been negotiating with Nepal for a long time to import electricity. But it took a huge time to reach an understanding between Dhaka, Kathmandu and New Delhi to sign the proposed contract.

Now the three parties - BPDB from Bangladesh, Nepal Electricity Authority (NEA) from Nepal and NTPC Vidyut Vyapar Nigam (NVVN) from India will sign the tripartite agreement in this regard.

Sources said Bangladesh had to accept all Indian conditions to import the electricity from the Himalayan nation. The Indian firm NVVN was involved as per the Indian condition.

The previous Awami League government had said that if Bangladesh signs a deal with Nepal to import 40 MW electricity, it will create an opportunity to export electricity from Bangladesh as well during the winter season when power demand remains lower in Bangladesh.

This time Bangladesh will only sign a contract to import 40 MW power from Nepal, not to export power to Nepal, said another BPDB official.

Sources said the decision to start the import of 40 MW power from Nepal was finalised in a two-day meeting of the joint steering committee (JSC) and joint working committee (JWC) on Bangladesh-Nepal power and energy sector cooperation on May 14-15 in 2023 at Patuakhali in Bangladesh.

Ahead of the meeting, Nepalese Foreign Minister Narayan Prakash Saud visited Dhaka and held a meeting with Bangladeshi public and private sector officials where he urged them to invest in the hydropower sector in the Himalayan nation, holding about 60,000 MW of clean energy potentials.

In the follow-up, according to a report of the Kathmandu Post, during the Nepalese prime minister's India visit (30 May-1 June in 2023), India agreed to facilitate Nepal to export 40 MW electricity to Bangladesh through Indian transmission infrastructure.

Currently, Bangladesh is importing electricity from India through a similar arrangement where the Indian company NTPC Vidyut Vyapar Nigam (NVVN) is selling power to BPDB.

Sources said apart from the 40 MW import plan, Bangladesh eventually wants to import 500 MW of hydroelectricity from Nepal via India through Indian company GMR. But no progress has been made in recent days in this regard.