Bangladesh Bangladesh and Nepal agree to sign 25-year power sale deal

[Isa Khan]

Bangladesh and Nepal agreed to sign a 25-year-long agreement for the export of 40MW electricity, an official from Nepal Electricity Authority (NEA) has said.

"We have agreed to sign a 25-year power sale agreement with Bangladesh. It is in line with our proposal to the Bangladeshi side," NEA Managing Director Kul Man Ghising, reports to the Kathmandu Post.

He said this deal of Nepal with Bangladesh is similar to the long-term inter-governmental power trade agreement initiated with India during Nepalese Prime Minister Pushpa Kamal Dahal's recent visit there.


NEA Power Trade Director Prabal Adhikari said the Bangladeshi side had earlier responded to Nepal's proposal stating that it would prefer a five-year agreement with an option of renewal, citing the uncertainty over the power sector's evolution.

However, NEA MD Ghising said Bangladesh finally agreed to a 25-year deal, which is yet to be signed.

"Except tariff, we have reached an understanding on all other issues," Ghising said.

The understanding will be formalised once Bangladesh, Nepal and India sign a tripartite agreement on power sale from Nepal to Bangladesh using the Indian territory.

NEA officials said that Bangladesh first wanted to settle issues other than tariff. The technical and commercial aspects of the agreement were discussed and the two sides reached an understanding.

"We plan to offer a good tariff as a good gesture, as it will be a government-to-government deal. A reference can be the existing electricity price in Bangladesh but we are yet to decide on the rate," Ghising said.

Bangladesh will directly pay the transmission charge and service fees to NTPC Vidyut Vyapar Nigam Limited (NVVN), India's nodal agency for cross-border power trade, NEA said.

The transmission charge will be equivalent to what India's power traders are currently charging power buyers.

"Transmission charge will be levied as per India's open access rules, as mentioned in the draft of the proposed power sale agreement," said Prabal Adhikari.

"In line with the transmission charge being levied in India, Bangladesh might have to pay 40-55 paisa [in Indian currency] per unit depending on the technical conditions of the transmission infrastructure including the load," he added.

Bangladeshi entities may also have to pay service fees for the Indian company's effort to obtain Indian regulatory approval.

"The service charge may range from 4 to 7 paisa [Indian currency] per unit," the NEA official further said.

Bangladesh and Nepal agreed to sign a tripartite agreement among the NEA, the Bangladesh Power Development Board (BPDB) and the NVVN of India during the energy secretary-level joint steering committee meeting held in mid-May.

India has also expressed its readiness to facilitate electricity trade between its two neighbours.

NEA MD Ghising said that India had also agreed to facilitate the electricity trade between Nepal and Bangladesh for 25 years. NEA has requested the Indian authorities to allow it to sell the power generated from the 52.4MW Likhu-4 project to Bangladesh.

Bangladesh and Nepal agree to sign 25-year power sale deal

Under the agreement, 40MW electricity from Nepal would be exported to Bangladesh

www.tbsnews.net

 

[Isa Khan]

Nepal is preparing to change projects whose electricity will be exported to Bangladesh once a tripartite agreement involving India gets signed.

Earlier, the state-owned Nepal Electricity Authority (NEA) had requested the Indian authorities to allow it to sell the power generated from the 52.4 megawatts (MW) Likhu-4 project to Bangladesh.

“As India has agreed to allow the transmission of a maximum 40 megawatts of electricity through its existing transmission line for export of Nepal’s power to Bangladesh, the NEA is preparing to send alternative hydropower projects for the southern neighbour’s approval,” said Prabal Adhikari, power trade director at the NEA.

Earlier, Nepal and Bangladesh had agreed to make efforts for trading of up to 50MW of electricity. But the southern neighbour notified that it would allow the transmission of up to 40MW only, considering the existing unused capacity of the southern neighbour’s transmission infrastructure.

“We now plan to sell electricity generated by the 24MW Trishuli Hydropower Project and another project whose combined capacity reaches 40 MW–41 MW,” said Adhikari. Trishuli was among first two projects to get the southern neighbour’s approval to sell power in the Indian market in 2021.

Nepal and Bangladesh are negotiating for a long-term power trade agreement for the export of 40MW electricity generated in Nepal to Bangladesh. As per the ‘Procedure for approval and facilitating Import/Export (Cross Border) of Electricity by the Designated Authority’, it is necessary to take approval from the southern neighbour’s concerned authority to do transactions of electricity through the Indian grid under the tripartite agreement.

“Once the issue of tariff is settled with Bangladesh, we will send the list of projects to India for necessary approval for exporting power to Bangladesh generated at those projects,” said Adhikari.

The NEA plans to choose projects for exporting power to Bangladesh which have already got the southern neighbour’s approval for exporting power to India.

“This will help fast-tracking the approval process from the Indian authorities,” said Adhikari. That’s why the NEA chose the Trishuli project which was built with the Indian government’s assistance.

Nepal has sought the Indian government’s approval to sell power generated by an additional 18 hydropower projects in the Indian market. The approval is stuck with the Indian bureaucracy and has been pending since August 2021.

The combined generation capacity of these projects is more than 1,000MW, according to the NEA.

India has also expressed its readiness to facilitate electricity trade between its two neighbours when Prime Minister Pushpa Kamal Dahal went on a state visit to India from May 31 to June 3.

Nepal and Bangladesh agreed to sign a tripartite agreement featuring the NEA, the Bangladesh Power Development Board (BPDB) and the NVVN of India during the energy secretary-level joint steering committee meeting held in Bangladesh in mid-May.

Nepali officials had said at that time that a consensus was reached on starting the trading of power within the wet season this year. But everything hasn’t been ready so far for the trading of power between Nepal and Bangladesh.

According to Adhikari, the only thing remaining in the bilateral negotiation is determining the tariff of electricity. “We are informed that the Bangladeshi side is in the process of forming a negotiation team on tariff,” he said.

On tariff, the NEA seems to be open to negotiations. “We plan to offer a good tariff as a goodwill gesture, as it will be a government-to-government deal,” NEA’s Managing Director Kulman Ghising has told the Post. “A reference point could be the existing electricity price in Bangladesh.”

The NEA officials, meanwhile, said the transmission charges and service fee to be paid to the Indian authorities have been more or less finalised. The transmission charges will be equivalent to what India’s power traders are currently charging power buyers and it will be levied as per India’s open access rules.

The Bangladeshi entities may also have to pay service fees for the Indian company’s efforts in obtaining its government’s regulatory approval.

The NVVN, which is India’s nodal agency for cross-border power trade, will be responsible for collecting the fees, according to Adhikari, the NEA power trade director.

Nepal to change projects whose power will be sold to Bangladesh

Nepal Electricity Authority will send the list of hydropower projects to India for approval once the issue of electricity tariff is settled, officials say.

kathmandupost.com