Bangladesh and Nepal agree to sign 25-year power sale deal
Under the agreement, 40MW electricity from Nepal would be exported to Bangladesh
Bangladesh and Nepal agreed to sign a 25-year-long agreement for the export of 40MW electricity, an official from Nepal Electricity Authority (NEA) has said.
"We have agreed to sign a 25-year power sale agreement with Bangladesh. It is in line with our proposal to the Bangladeshi side," NEA Managing Director Kul Man Ghising, reports to the Kathmandu Post.
He said this deal of Nepal with Bangladesh is similar to the long-term inter-governmental power trade agreement initiated with India during Nepalese Prime Minister Pushpa Kamal Dahal's recent visit there.
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NEA Power Trade Director Prabal Adhikari said the Bangladeshi side had earlier responded to Nepal's proposal stating that it would prefer a five-year agreement with an option of renewal, citing the uncertainty over the power sector's evolution.
However, NEA MD Ghising said Bangladesh finally agreed to a 25-year deal, which is yet to be signed.
"Except tariff, we have reached an understanding on all other issues," Ghising said.
The understanding will be formalised once Bangladesh, Nepal and India sign a tripartite agreement on power sale from Nepal to Bangladesh using the Indian territory.
NEA officials said that Bangladesh first wanted to settle issues other than tariff. The technical and commercial aspects of the agreement were discussed and the two sides reached an understanding.
"We plan to offer a good tariff as a good gesture, as it will be a government-to-government deal. A reference can be the existing electricity price in Bangladesh but we are yet to decide on the rate," Ghising said.
Bangladesh will directly pay the transmission charge and service fees to NTPC Vidyut Vyapar Nigam Limited (NVVN), India's nodal agency for cross-border power trade, NEA said.
The transmission charge will be equivalent to what India's power traders are currently charging power buyers.
"Transmission charge will be levied as per India's open access rules, as mentioned in the draft of the proposed power sale agreement," said Prabal Adhikari.
"In line with the transmission charge being levied in India, Bangladesh might have to pay 40-55 paisa [in Indian currency] per unit depending on the technical conditions of the transmission infrastructure including the load," he added.
Bangladeshi entities may also have to pay service fees for the Indian company's effort to obtain Indian regulatory approval.
"The service charge may range from 4 to 7 paisa [Indian currency] per unit," the NEA official further said.
Bangladesh and Nepal agreed to sign a tripartite agreement among the NEA, the Bangladesh Power Development Board (BPDB) and the NVVN of India during the energy secretary-level joint steering committee meeting held in mid-May.
India has also expressed its readiness to facilitate electricity trade between its two neighbours.
NEA MD Ghising said that India had also agreed to facilitate the electricity trade between Nepal and Bangladesh for 25 years. NEA has requested the Indian authorities to allow it to sell the power generated from the 52.4MW Likhu-4 project to Bangladesh.
