Nepalese envoy highlights huge cooperation potential in energy sector between Nepal, Bangladesh

Nepalese Ambassador to Bangladesh Ghanshyam Bhandari on Thursday said his country sees huge potential to cooperate with Dhaka in five key areas, including the energy sector, setting milestones in bilateral and sub-regional cooperation.

"We are encouraged by the decision of the government of India to facilitate the first trilateral power transaction from Nepal to Bangladesh, through the Indian grid with an export of up to 40 MW. This is just a baby step and a symbolic one. But this will be a huge milestone to kickstart a new drive for our bilateral and, in fact, the sub-regional cooperation in energy," he said.

In addition, the ambassador said talks are also underway for joint investment in the 683 MW Sunkoshi III hydropower project in Nepal.

"I understand Bangladesh authorities are engaged with GMR Company of India in finalizing the deal for 500 MW of electricity from Upper Karnali," he said.

The Nepalese ambassador was delivering a keynote speech at Cosmos Dialogue titled "Bangladesh-Nepal Relations: Prognosis for the Future" in the city, which was organized as part of the "Ambassadors' Lecture Series" by the Cosmos Foundation.

Former Bangladesh High Commissioner to India and Ambassador to the United States and Honorary Emeritus Advisor, Cosmos Foundation Tariq A Karim chaired the discussion, while Cosmos Foundation Vice President Masud Khan delivered welcome and closing remarks.

Former Secretary, Ministry of Foreign Affairs Sabbir Ahmed Chowdhury, former Principal Secretary to the Prime Minister of Nepal Hari Sharma, Dhaka University International Relations Department Prof Lailufar Yasmin, and Assistant Professor, Department of Economics, East West University Parvez Karim Abbasi, among others, spoke at the symposium. Cosmos Foundation Chairman Enayetullah Khan was also present.

The envoy said Nepal's hydropower potential and Bangladesh's increasing energy needs are a much-talked-about subject.

"Currently, Nepal has an energy surplus. But what we are producing now is just over 5 percent of what is economically viable. This means if fully realized, Nepal's hydropower can make tremendous contributions to the clean energy solutions of South Asia," said the ambassador.

Tariq Karim said if there is one factor that will determine the future of Bangladesh-Nepal relations, it is to cooperate in the energy sector between the two countries.

He said now Nepal and Bangladesh finally are about to enter a new phase in terms of power supply, while he sees huge and very exciting possibilities.

"If 40 MW starts coming, that is a beginning, but it will open a floodgate," said the former diplomat, adding that through this, they can begin the transition more quickly to green energy, not just clean energy.

He highlighted the hydropower potential that the region, especially Bhutan, Nepal, and Northeast India, holds.

Karim said the relations have not gone really at the pace that kept with the expectations from the sides.

"We have to understand if we want something, we have to give something. If we deny something, we will also be denied something," he mentioned.

Masud Khan said one of the most promising sectors between the two countries is energy.

"This will also grow as Nepal develops its hydropower capabilities and Bangladesh optimizes its gas output," he said.

There is a secretary-level joint steering committee for energy cooperation, which held a significant session in August 2022.

However, Masud said trade in energy and electric power will need to be trilateral as India's consent and participation would perhaps be essential and critical.

"South Asian diplomacy will require putting some emphasis upon that aspect," he mentioned.

Sabbir Ahmed Chowdhury said the two countries need to explore the untapped potential through bilateral and regional cooperation

He said through a tripartite arrangement, the export of 40-50MW electricity from Nepal to Bangladesh is progressing. "It is a small step in the progress of the relationship between Bangladesh and Nepal, but a giant leap for regional cooperation and its implications for future regional cooperation will be extensive."

Sabbir also said it is necessary to focus on trade arrangements between the two countries.

Hari Sharma said the two countries and its people need to understand each other better and need to understand each other's sensitivity.

He said the two countries need to have regular "strategic dialogue" to take forward the relations, noting that there are very little interactions between knowledge centers.

Hari Sharma said the relationship needs to be nurtured through various mechanisms that are available to two countries. "If we exchange more, our relationship will grow further."

Prof Lailufar Yasmin highlighted the importance of soft power in strengthening the relations, noting that there should be efforts on enhancing cooperation in the cultural arena.

She said the two countries can go for joint movie production.

Prof Abbasi laid emphasis on investment flow from both ends and felt for an agreement on investment and protection mechanism for joint venture investment.

He also highlighted potential in the tourism sector and said the two countries must have broader tourism facilities with the support of India. "Tourism infrastructure needs to be developed."

Prof Abbasi also highlighted the importance of having a "sustained engagement" for greater benefits.

Ambassador Ghanshyam said as they look to the next fifty years and beyond, there is a need to build on the progress and consolidate our partnership with more focus on enhancing economic linkages.

"With just 51 years on the clock of our formal diplomatic relationship, we can of course take stock of, celebrate, and commemorate the achievements we have made together," he said, highlighting five key areas of cooperation – energy, trade and investment, connectivity, tourism and people to people contacts, and climate change.

The two governments have agreed to start power trade at the earliest, even with a small volume of 40-50 MW to begin with.

"We know power trade between our two countries cannot happen without India's cooperation and collaboration," said the envoy, adding that the importance of energy cooperation is immense.

He said there is a Chinese proverb: 'The best time to plant a tree was 20 years ago. The second best time is today'.

"This resonates so well when we talk about energy cooperation between our two countries and among countries in our region. One realized, it will be a much-needed springboard to take our bilateral relations as well as the sub-regional cooperation, to the next level," said the envoy.

Trade and Investment

The bilateral trade between Nepal and Bangladesh is increasing but remains at a modest level. It was around USD 70 million in 2022.

The figures show that trade is heavily skewed in favour of Bangladesh, said the ambassador.

Nepal primarily exports red lentils, ginger, cardamom and other agricultural products, fruits, plants, and plant parts, among others. Major exports from Bangladesh include oil cakes, electrical and electronic items, jute and textiles, potatoes, and pharmaceuticals.

The government of Bangladesh decided in December 2022 to lift a two-decade-long ban on Nepali yarns entering Bangladesh via Banglabandha Land Custom Station. "We thank the Government of Bangladesh for that."

The private sectors- led by premier chambers of our countries FNCCI and FBCCI- are closely connected.

"But given the closeness and proximity between our two countries, what we have achieved is nowhere close to the potential," said the ambassador.

There is a need to further intensify our efforts to enhance trade and investment linkages, including by eliminating or reducing the other duties and charges (ODCs), he said, adding that, "We must address the non-tariff barriers including through upgrading the facilities at land customs stations and standardizing the procedures."

Connectivity

Ambassador Bhandari said energy trade, or any other aspect of economic engagements for that matter, will not be possible without connectivity.

"Connectivity- both in the physical and digital sphere- and through land, air and water is the beating heart of bilateral, regional, and sub-regional cooperation," he said.

Currently, two airlines – Biman Bangladesh and Himalaya Airlines – are operating 10 direct flights per week between Kathmandu and Dhaka.

The movement of goods and people between our two countries is done mostly through Banglabadha and Burimari land ports.

"We thank the Government of Bangladesh for the offer to use port facilities at Mongla and Chittagong for Nepal's trade with the third countries," said the envoy.

Talking about sub-regional connectivity, the negotiations on the movement of cargo and passenger vehicles under the BBIN framework are underway, he said.

Successful conclusion of the negotiations, by addressing each other's concerns, if any, will be a significant milestone towards achieving seamless road connectivity in the sub-region, said the envoy.

Talking about digital connectivity, he said it is one of the emerging frontiers. "IT sector is flourishing both in Nepal and Bangladesh. We need to explore this new area, promote collaboration, and enhance digital connectivity."

Tourism

Bhandari said historically tourism and people-to-people exchanges have been a strong connecting thread between the two countries.

"Our two countries offer unique and diverse touristic products- be it in terms of Nepal's majestic mountains, verdant valleys, beautiful waterfalls and historical and archaeological sites or Bangladesh's fertile plains, exquisite sea beaches, captivating mangrove forests, and cultural and historical monuments," he said.

The envoy said they must build linkages between the Himalayas and the Bay of Bengal, between hills and plains, and between markets and minds.

"But much remains to be done to connect our religious and archaeological sites, and eco-tourism and adventure destinations through tourism circuits. We must promote innovation, ignite entrepreneurship, and build stronger bonds between the peoples and business communities," he said.

On climate change, the envoy said both Nepal and Bangladesh are at the frontline of the climate crisis.

"We can prioritize climate action and build climate-resilient pathways in line with the pledges of Nepal and Bangladesh to reduce carbon emissions and in line with the global target of net-zero emission scenario by 2050," he said.

The ambassador said they must continue to champion the climate agenda at the global stage, just like we did around 'loss and damage' at Sharm El-Sheikh. "We need to continue raising voices, including for climate finance, share our experiences and best practices, and work together for protecting our peoples, and for conserving the ecosystems."

Just like two 'schoolmates of development', the ambassador said, the two countries are both set to graduate from the Least Developed Country (LDC) category by 2026.

Of course, graduation is an important development milestone for both of our countries, he said, but going forward, the two countries are sure to confront various challenges including due to the loss of international support measures.

"So, we must work together and push against any pushback to ensure a smooth, sustainable, and irreversible graduation. Sharing of experiences during the current preparatory period will be critical," the envoy said.

In his concluding remarks, Masud Khan said they must explore and exploit mutual opportunities and resources in three areas like 3 Cs, climate, culture, commerce from tourism to renewables, from climate and cultural collaboration to commercial collaboration. "The opportunities are endless."