Bangladesh Delegation Travels to Nepal to Finalize 40 MW Electricity Import Deal

The electricity will be imported through Indian territories, requiring a tripartite agreement between Bangladesh, Nepal, and India.

Staff Reporter

Oct 1, 2024, 07:51 AM2 min read

Bangladesh Delegation Travels to Nepal to Finalize 40 MW Electricity Import Deal

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A high-level delegation from Bangladesh, led by Senior Secretary of the Power Division Habibur Rahman, arrived in Nepal on Monday to finalize a contract for importing 40 megawatts (MW) of electricity from the Himalayan nation. The agreement is set to be signed on October 4.

The electricity will be imported through Indian territories, requiring a tripartite agreement between Bangladesh, Nepal, and India. Sources in the Power Division confirmed the arrangement, noting that India’s involvement is necessary as the power will be transmitted via Indian infrastructure.

Earlier, Bangladesh’s Cabinet Committee on Government Purchase (CCGP) approved a proposal by the Bangladesh Power Development Board (BPDB) to import electricity from Nepal. Under the terms of the agreement, the electricity will be priced at 6.40 US cents per kilowatt hour (kWh) at the Muzaffarpur Substation in India, with additional charges for the Indian contractor’s trading margin and transmission fees set by the Indian Central Electricity Regulatory Commission (CERC). In total, the electricity is expected to cost around Tk 8.50 per unit.

Officials from BPDB noted that the tariff would have been lower if Bangladesh could directly import electricity from Nepal. However, due to the need to use Indian infrastructure and involve the Indian trading firm NTPC Vidyut Vyapar Nigam (NVVN), Bangladesh must adhere to Indian conditions.

“There is only a 26-kilometer transmission line through Indian territory. If Bangladesh had been allowed to build this at our own cost, the tariff would be lower, around Tk 7 per unit,” a BPDB official said.

The process of negotiating with Nepal to import electricity has been lengthy, requiring an understanding between Dhaka, Kathmandu, and New Delhi. With the signing of the tripartite agreement, the BPDB, Nepal Electricity Authority (NEA), and India’s NVVN will formalize the deal.

In addition to the 40 MW deal, Bangladesh has ambitions to import up to 500 MW of hydroelectric power from Nepal in the future, but progress on that front has been slow.

Bangladesh currently imports electricity from India under a similar arrangement, facilitated by the Indian firm NVVN. This new deal with Nepal marks a step towards greater energy cooperation in the region.

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