Bangladesh to buy power from Nepal

Kathmandu, Dec. 20

Bangladesh government has decided to purchase electricity from Nepal. 

The Cabinet Committee on Public Purchase (CCPP) has approved a proposal for importing about 500 MW electricity from GMR Upper Karnali Hydroelectricity Project. 

Dhaka Tribune reported that the committee meeting chaired by Finance Minister Mustafa Kamal had given approval to the proposal on Wednesday. 

Energy from Nepal will be exported to Bangladesh through NTPC Vidyut Vyapar Nigam Limited, an Indian-government owned company, following the terms and conditions of the Indian regulatory commission. 

The 900-MW GMR Upper Karnali Hydropower Ltd. termed it as a historical event for Nepal and the region as well. 

“It has opened the way for energy trading in the South Asian sub-region which will benefit all the countries in the future,” said K.K. Mishra, Project Head of the company.

According to him, positive nod from the purchase committee of the Bangladesh government was critical for the initiative as it would clear the way for the approval of the power trade proposal. 

Now GMR has to show a bank guarantee of US$ 5 million, and there will be the exchange of the letter of intent (LoI) within 5 weeks. 

Located in Surkhet, Achham and Dailekh districts, Upper Karnali was awarded to GMR in 2008 as an export-oriented project aimed at the Indian market, but the developer has gone an extra mile to sell the energy in the third country market. 

The Dhaka Tribune also reported that the state-owned Bangladesh Power Development Board and the NVVNL signed a non-bonding Memorandum of Understanding (MoU), and power sales agreement between the two would be signed soon. 

Nepal’s energy export to the third countries was made possible after India amended its cross-border power trading regulation in December last year, paving the way for power producers in Nepal to sell energy not only to India but to other countries as well. 

India’s Cross-Border Trade of Electricity Regulations, 2019 has a provision that ‘the Transmission Planning Agency of India in consultation with the transmission planning agency of the neighbouring country shall grant access to the participating entities to use cross-border transmission link for cross-border trade of electricity’.

Bangladesh has also shown interest in investing in Nepal’s hydropower projects. It has been urging the government to provide opportunity to invest about USD 1 billion in such project and export electricity to Bangladesh. 

Published in The Rising Nepal daily on 21 December 2019.