Nepal proposes tariff for power export to Bangladesh

Nepal has suggested a tariff for the electricity it intends to sell to Bangladesh as the two parties move closer to finalising a historic agreement on electricity trade, according to The Kathmandu Post. Both countries have preliminarily agreed to the export of 40MW of electricity from Nepal to Bangladesh.

During Nepal Prime Minister Pushpa Kamal Dahal's visit to India in May-June last year, India pledged to facilitate the export of 40MW of electricity to Bangladesh.

Given that Indian territory lies between Nepal and Bangladesh, the involvement of India is crucial for both parties in the energy trade.

"We recently sent a tariff proposal to the Bangladeshi side in a sealed envelope. The rate that we have proposed is approximately equivalent to the rate that we are charging India under a five-year power purchase agreement," said Pradeep Kumar Thike, deputy managing director who oversees power trade at the Nepal Electricity Authority (NEA).

Thike did not want to divulge the actual tariff the NEA had proposed. But based on a five-year-long power purchase agreement signed between the NEA and India's NTPC Vidyut Vyapar Nigam Limited back in May last year, the tariff could be below Rs10 per unit, reports The Kathmandu Post.

In September last year, the southern neighbour granted Nepal approval to sell 110MW of power generated by the 83.42MW Solu Khola (Dudh Koshi) and 26.19MW Dordi Khola Hydropower Project to India as per the agreement signed between the NEA and Vidyut Vyapar Nigam Limited.

Former NEA official Prabal Adhikari had told The Kathmandu Post in June last year that the NEA would receive a net tariff of Rs5.25 (Rs8.40) per unit from India after trade margin, transmission losses and transmission charges.

"The NEA would not bear the cost of transmission and trade margin [service charge] for supply of power to India," he had said.

According to NEA officials, the tariff is the final part of the ongoing negotiation with Bangladesh regarding the sale of 40 MW of power.

Once the two sides agree on a tariff to be charged, Nepal, Bangladesh and India are expected to sign a tripartite deal under which Nepal will export power to Bangladesh for the first time.

In May last year, Nepal and Bangladesh agreed to sign a tripartite agreement between the NEA, the Bangladesh Power Development Board and the Vidyut Vyapar Nigam Limited during the meeting of the energy secretary-level joint steering committee.

"We now await the opinion of the Bangladeshi side on the tariff we have proposed. As per the understanding reached between the two sides, Nepal will export power from 15 June to 15 November. The two sides have also agreed to sign a five-year power sale agreement," Pradeep Kumar Thike said.