Nepal proposes tariff for electricity export to Bangladesh

Nepal has proposed the tariff to be charged on power to be exported to Bangladesh as the two sides inched closer to a deal for the first-ever trading of electricity.

Two countries have already agreed in principle for the export of 40MW of electricity from Nepal to Bangladesh.

When Prime Minister Pushpa Kamal Dahal visited India in May-June last year, the southern neighbour had promised to facilitate the export of 40MW electricity to Bangladesh.

With Indian territory lying between Nepal and Bangladesh, it is necessary for both sides to take India on board in the energy trade.

In September last year, the southern neighbour granted Nepal an approval to sell 110MW of power generated by the 83.42MW Solu Khola (Dudh Koshi) and 26.19MW Dordi Khola Hydropower Project to India as per the agreement signed between the NEA and NVVN Limited.

According to NEA officials, tariff is the final part of the ongoing negotiation with Bangladesh regarding the sale of 40MW.

Once the two sides agree on a tariff to be charged, Nepal, Bangladesh and India are expected to sign a tripartite deal under which Nepal will export power to Bangladesh for the first time.

Nepal and Bangladesh in May last year had agreed to sign a tripartite agreement between the NEA, the Bangladesh Power Development Board and the NVVN during the meeting of the energy secretary-level joint steering committee.

Earlier, Bangladesh had sent a draft request for proposal (RfP) in response to which Nepal had proposed the tariff. Besides tariff, Nepal has also included details on how Nepal would deliver power to Bangladesh.

NEA officials said that transmission charges will be equivalent to what India’s power traders currently charge buyers and levied as per India’s open access rules.

Bangladeshi entities may also have to pay service charges to the NVVN, which is India’s nodal agency for cross-border power trade, for the agency’s efforts in obtaining its government’s regulatory approval. The export will be facilitated by utilising the high-voltage Baharampur-Bheramara cross-border transmission link between India and Bangladesh.

Nepal has so far not exported power to other countries except India. Both Nepal and India have agreed, in principle, to involve Bangladesh as a partner for energy cooperation when they issued the Joint Vision Statement on Power Sector Cooperation in April 2022

Bangladesh is also keen to buy more.

Speaking at an interaction in Lalitpur last month, Bangladeshi Ambassador to Nepal Salahuddin Noman Chowdhury said that his country’s existing generation has not been enough to meet the growing demand for power and Nepal could fill that gap.

“Currently, Bangladesh produces around 25,000MW of electricity against the demand of over 30,000MW,” said Chowdhury. “If Nepal supplies us 3,000–4,000MW right now, we can consume it all.”