Dhaka wants local investors in Nepal’s hydropower

Dhaka plans to urge Kathmandu next month to allow two of Bangladesh's experienced power companies to invest in hydropower projects in Nepal.

If the plan gets the go-ahead, it will help Bangladesh import low-cost green electricity and meet its goal of 40% renewable energy by 2041.

Bangladesh is expected to propose the investment plan at a meeting of the joint working group and steering committee of the two countries in July. The date of the meeting is expected to be fixed next week.

Sources in the Power Division said since Nepal is open for investment in various hydropower projects, Bangladesh's large power companies – Summit Group and United Group – are interested in working there.

Besides, the government also wants to build a new hydropower plant through a joint venture between the Bangladesh Power Development Board and its counterpart, the Nepal Electricity Authority.

Asked for his comments, Engineer Mohammad Hossain, director general of the Power Cell, the policy research wing of the Power Division, told The Business Standard that the division has been considering both government-to-government and private investments in hydro projects in the Himalayan country.

"Some private power producers, such as Summit and United, have experience of implementing large power projects with 400MW to 500MW capacity. We have talked to them and found their responses to be good," he added.

There are around 53 private power producers in Bangladesh with a combined capacity of generating 11,108MW of electricity.

Meanwhile, quoting Madhu Prasad Bhetuwal, spokesperson of Nepal's energy ministry, The Kathmandu Post  reported that the two countries will also discuss developing two storage-type hydropower projects – 683MW Sunkoshi-3 Hydropower Project and Khimti Sivalaya Hydropower Project – with Bangladeshi investments.

Nepal has a hydropower potential of around 80,000MW though the country at present has the capacity to produce around 2,000MW. It has been exporting power to India since 2019 at a rate of six Indian rupees per unit. The price for Bangladesh has not yet been fixed. 

In recent times, Bangladesh has also signed a power purchase agreement (PPA) with Nepal to import 500 megawatts from the proposed 900MW run-of-the-river hydroelectric power plant – Upper Karnali Hydropower Project – which is supposed to be developed by India's GMR Group.

Bangladesh plans to draw electricity from this project from 2026. The final PPA for the purchase is now in the vetting stage.

Complexity over transmission line

On the electricity question regarding Bangladesh, Bhutan, India, and Nepal – the BBIN nations – India is in a key position from a geographical perspective to transmit electricity from one country to another.

At present, there are cross-border transmission lines between Nepal and India and India and Bangladesh. But there are no trilateral arrangements with regard to trade in electricity.

Nepal has cross-border transmission lines with the Indian states of Bihar, Uttar Pradesh and Uttarakhand, but it has no line with West Bengal. Bangladesh has cross-border transmission lines with the Indian states of West Bengal and Assam.

"If India helps, there is still a chance for a trading of electricity between Nepal and Bangladesh through existing Indian infrastructure too," Bhetuwal told The Kathmandu Post.

"But there have to be trilateral meetings and agreements," he added.

During a two-day bilateral meeting between India and Nepal beginning on 24 February, both countries decided to conduct a feasibility study on electricity line installation, reports The Kathmandu Post.

Currently, Bangladesh imports 1,160MW power from India through Baharampur-Bheramara and Tripura-Cumilla cross-border grid lines.

The country needs higher power cross-border transmission lines as it has a target of increasing the share of imported electricity by up to 40% by 2041 in the energy mix, when the total generation capacity will reach 60,000MW.

At present, the country generates 52% of electricity from natural gas, 32% from liquid fuel and 8% from coal, while the remaining 8% comes from imports.