Nepal to change power projects that will export electricity to Bangladesh

Nepal is preparing to change projects whose electricity will be exported to Bangladesh once a tripartite agreement involving India gets signed. Nepal Electricity Authority (NEA) will send the list of hydropower projects to India for approval once the issue of electricity tariff is settled, officials said.

"As India has agreed to allow the transmission of a maximum of 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 NEA Power Trade Director Prabal Adhikari, reports the Kathmandu Post. 

Bangladesh and Nepal had agreed to make efforts for trading up to 50MW of electricity. The 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. However, India notified that it would allow the transmission of up to 40MW only, considering the existing unused capacity of the country'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 the first two projects to get India's approval to sell power in the country's market in 2021.

Bangladesh and Nepal are negotiating a long-term power trade agreement for the export of 40MW of electricity.

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 Indian 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, adding NEA chose the Trishuli project which was built with the Indian government's assistance, because of that reason. 

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 also expressed its readiness to facilitate electricity trade between its two neighbours when Nepal's Prime Minister Pushpa Kamal Dahal went on a state visit to India this year.

Bangladesh agreed to sign a tripartite agreement featuring the NEA, the Bangladesh Power Development Board (BPDB) and the NTPC Vidyut Vyapar Nigam Ltd of India during the energy secretary-level joint steering committee meeting 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.

NEA said 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," NEA Power Trade Director Prabal Adhikari said.

"We plan to offer a good tariff as a goodwill gesture, as it will be a government-to-government deal. A reference point could be the existing electricity price in Bangladesh," NEA Managing Director Kulman Ghising said.

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.

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, NEA officials said.