Bangladesh-Nepal 683MW hydropower gets environmental clearance

Nepal has advanced another step to attract Bangladeshi investment through joint ventures as its forest and environment ministry cleared the Environmental Impact Assessment Report for the proposed 683 megawatt Sunkoshi-3 hydropower project, reports The Kathmandu Post.

Referring to Madhu Bhetuwal, spokesperson for the Nepal energy ministry, the outlet reported that the authorities will share the report with the Bangladeshi side for its review.

"After that, the two sides are expected to sign a memorandum of understanding on project development," reads the report.

However, Power Division Secretary Md Habibur Rahman told The Business Standard that there has been no progress after the matter was discussed in the fourth meeting of the working group and joint steering committee in late August.

"There was a discussion on joint venture investment in August this year. Apart from this, there is no update on the issue. But the issue will be discussed in the next meeting," he added.

In the fourth meeting of the joint steering committee, officials from Bangladesh and Nepal discussed both government-to-government and private investments in hydropower projects in the Himalayan country.

As per a press statement issued by the Ministry of Energy, Water Resources, and Irrigation of Nepal at that time, the two sides agreed that Nepal would send the Environment Impact Assessment (EIA) report to Bangladesh, as early as possible, on which the Bangladeshi side would give its opinion at the earliest.

Nepal planned to implement the proposed Sunkoshi 683MW Hydropower Project with Bangladeshi forex investment.

According to sources at Bangladesh's Power Division, Nepal anticipates investment on a government-to-government or public-private partnership basis.

The sources also said Summit Group and United Group are interested in working there.

For Nepal, however, its state-owned power utility – Nepal Electricity Authority – seems to be the obvious choice for the joint venture.

But, SM Wazed Ali Sardar, member (Generation) and acting chief engineer of an independent power producer cell, told TBS that in the joint venture, Bangladesh Power Development Board will hold the country's share.

"However, the overall picture is dependent on the transmission system, which is reliant on India," he said.

He hopes that the engaged parties will be able to reach a decision soon.

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.

In recent times, Bangladesh has decided to sign a power purchase agreement (PPA) with Nepal to import 500MW 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 import electricity from this project starting in 2026, but the price has not yet been fixed.

Apart from these, in last August's meeting, Nepal and Bangladesh had decided to request India to provide passage for the export of 40-50MW of electricity from Nepal to Bangladesh in the initial phase, utilising the high voltage direct current power systems located in Bheramara, Bangladesh.

For this, they agreed to ask for a trilateral energy sales and purchase agreement among the NEA, Bangladesh Power Development Board, and India's NTPC Vidyut Vyapar Nigam on utilising the Baharampur-Bheramara cross-border power transmission link.

Power Secretary Md Habibur Rahman, however, said that they have not proposed India for the tripartite agreement.

"We will definitely propose it in the next bilateral meeting," he added. 

Currently, Bangladesh imports 1,160MW of power from India through the 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 its electricity from natural gas, 32% from liquid fuel, and 8% from coal, while the remaining 8% comes from imports.