Export of 40 MW of hydropower to Bangladesh is finalized, with a trilateral PSA to be signed

Kathmandu: After prolonged discussions and negotiations, Bangladesh is set to import 40 MW of hydropower from Nepal through a trilateral agreement. The agreement will be signed today between Nepal, Bangladesh, and an Indian nodal agency.

The sixth meeting of the Nepal-Bangladesh Energy Secretary-Level Joint Steering Committee (JSC), which concluded on Wednesday (October 2), finalized the decision to sign this power trade agreement today. According to the Ministry of Energy, Water Resources, and Irrigation, the Power Sales Agreement (PSA) will be signed between the Nepal Electricity Authority (NEA), Bangladesh Power Development Board (BPDB), and Indian nodle agency NTPC Vidyut Vyapar Nigam (NVVN).

The meeting, co-chaired by Suresh Acharya, Secretary of the Ministry of Energy, Water Resources, and Irrigation of Nepal, and Mohammad Habibur Rahman, Senior Secretary of Bangladesh's Ministry of Power, Energy, and Mineral Resources, reached several key decisions, including the export of electricity to Bangladesh. The meeting also discussed advancing the process of developing the 683 MW, Sunkoshi-3 Reservoir Hydropower Project in collaboration with Nepal, India, and Bangladesh. The recommendations made by the Joint Working Group (JWG), which met on October 1, were discussed and endorsed.

Chiranjivi Chataut, Joint Secretary of the Energy Division and spokesperson for the Ministry, confirmed that the signing of the agreement to begin the export of 40 MW of hydropower to Bangladesh will take place today. He also mentioned that discussions included the construction and management of the Nepal-Bangladesh cross-border transmission line, the development of Sunkoshi-3, and cross-border electricity trade.

Furthermore, during the discussions, Bangladesh provided information about the PSA that will be signed between BPDB and GMR Energy Ltd. India for the purchase of electricity from the 900 MW Upper Karnali Hydropower Project. In a prior meeting on May 15, 2023, the JWG, co-chaired by Joint Secretary Chataut and Dr. Said Masum Ahmed Chowdhury, Additional Secretary of Bangladesh's Ministry of Power, Energy, and Mineral Resources, had recommended constructing and managing cross-border transmission lines, develop the Sunkoshi-3, and facilitating cross-border electricity trade.

The JSC and JWG were formed to facilitate, direct, and monitor progress on the implementation of the energy sector cooperation agreement signed between Nepal and Bangladesh on August 10, 2018 (Bhadra 2, 2075), under Clause 5 of the Memorandum of Understanding (MoU).

Key decisions of the meeting:

1.    A Power Sales Agreement (PSA) will be signed on October 3 between the NEA, BPDB, and NVVN of India to export 40 MW of hydropower produced in Nepal to Bangladesh.

2.    The Sunkoshi-3 Hydropower Project will be developed with cooperative participation from Nepal, Bangladesh, and India. A Joint Venture Agreement (JVA) to form a joint company between the NEA and BPDB to develop the project will be finalized in the next meeting. Additionally, the government of India will be requested to ensure that the electricity produced from Sunkoshi-3 is transmitted to Bangladesh via Indian grid.

3.    A technical and financial study of the proposed cross-border transmission lines for electricity trade between Nepal and Bangladesh will be conducted.

4.    Efforts will be made to explore possibilities for organizing a business conference to attract investment from the private sector in Bangladesh into Nepal’s hydropower sector.

5.    The MoU regarding cooperation in the alternative energy sector between Nepal's Alternative Energy Promotion Centre (AEPC) and Bangladesh's Sustainable and Renewable Energy Development Authority (SREDA) will be finalized after completing the necessary administrative processes and then signed.

6.    Both countries will initiate steps from their respective sides to create a trilateral mechanism between Nepal, Bangladesh, and India for electricity trade, the construction of cross-border transmission lines and other energy-related cooperation through bilateral, and trilateral meetings.