Bangladesh bargains for cheaper power from Nepal

February 26, 2024 2:44 pm

The power sale agreement between Nepal and Bangladesh has taken a hit as the latter sought to negotiate the prices quoted by the Nepal Electricity Authority (NEA).

Therefore, the inaugural power trade between the two neighbouring countries is currently on a halt until the tariff agreement on pricing is reached.

The Kathmandu Post, quoting NEA officials and Nepal’s energy ministry sources, reported that the Bangladeshi side wanted to cut the price quoted by the Nepali utility through negotiations.

“After Nepal stood its ground that the price it quoted was reasonable, they first wanted to discuss the matter with higher authorities,” an NEA official told The Kathmandu Post.

A delegation headed by NEA’s executive director Kul Man Ghising visited Bangladesh recently.

Although the exact tariff proposed by Nepal remains undisclosed, NEA sources suggest it’s approximately 7 cents [around Tk7.68] per unit.

“I was not part of the delegation, but I heard that the Bangladeshi side wanted to negotiate the rate as low as 5 cents per unit,” The Kathmandu Post quoted an official of the energy ministry on condition of anonymity.

Earlier, NEA’s Deputy Managing Director Pradeep Kumar Thike likened Nepal’s proposed price to what an Indian company paid for a medium-term power purchase agreement last year.

In May last year, NEA inked a five-year power purchase deal with NTPC Vidyut Vyapar Nigam (NVVN) Limited-India, securing a net tariff of IRs 5.25 (Rs 8.40) per unit for power supplied to India, without bearing transmission and trade margin costs.

Following the rate disagreement, the Nepali delegation returned home, although NEA officials remain hopeful for a tariff consensus in future talks.

Managing Director Pradeep Kumar told The Kathmandu Post, “They are ready to buy, and we are ready to sell. The talks have been positive, and we are hopeful for a final agreement in the upcoming meeting.”

According to him, the next meeting is yet to be scheduled.

A joint statement issued on 22 February said both parties’ intent to expedite a power sale agreement to facilitate Nepal’s electricity export during the forthcoming rainy season.

NEA’s proposal seeks to export 40MW of power from 15 June to 15 November, with the agreement slated for a five-year duration. The transmission will occur via the Nepal-India Dhalkebar-Muzaffarpur Cross Border Transmission Line and the India-Bangladesh Barampur-Bheramara Cross Border Transmission Line.

India has also already agreed in principle to facilitate the export of 40MW power from Nepal to Bangladesh.

During Prime Minister Pushpa Kamal Dahal’s visit to India last year, India pledged support for Nepal’s power export to Bangladesh through its existing transmission infrastructure.

Upon tariff agreement, Nepal, Bangladesh, and India anticipate signing a tripartite deal, marking Nepal’s maiden power export to Bangladesh.

Nepal and Bangladesh in May last year had agreed to sign a tripartite agreement between the NEA, the Bangladesh Power Development Board, and the NVVN during the meeting of the energy secretary-level joint steering committee.