Landmark Bangladesh-India-Nepal Energy Agreement in Final Discussion

29 June 2023

The trilateral power deal being discussed among the Governments of Bangladesh, India, and Nepal is expected to be signed soon. The three-way agreement among the Bangladesh Power Development Board (BPDB), the NTPC Vidyut Vyapar Nigam Limited (NVVN) of India, and the Nepal Electricity Authority (NEA), aims to enable Nepal to export an initial capacity of around 40 megawatts of power to Bangladesh via India.

Mr. Kul Man Ghising, Managing Director of NEA, shared that they have reached the final stage of negotiation with Bangladesh on the template of power sale agreement. Once the tariff has been determined, they will start with the power export.

Mr. Prabal Adhikari, Power Trade Director of NEA, noted that the second draft agreement between Nepal and NVVN—the nodal agency designated by the Government of India for cross-border power trade with its neighboring countries—has been sent to Bangladesh for review. Bangladesh has initially provided feedback on the first draft on matters concerning technical and commercial terms.

He added that the tariff for the power export to Bangladesh will likely be around the range of the average prices Nepal is receiving from India’s power exchange market. Concerning the transmission charge, it will likely be equivalent to the fee being charged by India’s power traders, in line with India’s open access rules.

Bangladesh has proposed a five-year agreement with Nepal with the option for renewal.

Bangladesh and Nepal, and India and Nepal, have separately reached understanding in principle on the export of power from Nepal to Bangladesh.

Bangladesh and Nepal agreed to start trading power at the earliest at the fifth meeting of the secretary-level Joint Steering Committee on energy cooperation held in May 2023, in Patuakhali, Bangladesh.

Nepal Prime Minister Pushpa Kamal Dahal visited India on 31 May–3 June. During this visit, India agreed to facilitate the first trilateral power transaction of up to 40 MW from Nepal to Bangladesh, through India's existing transmission infrastructure. 

Opportunities in Trilateral Energy Exchange

Discussing the opportunities of the agreement in an interview, Mr. Sunil KC, founder of the Asian Institute of Diplomacy and International Affairs, highlighted that this landmark development in the subregion’s cross-border energy trade is set to promote the exchange of electricity among the three countries and provide sustainable energy supply, encourage economic growth, and enhance energy security in the region.

Apart from the economic benefits it brings, Mr. Sunil emphasized that the agreement aligns with the commitment of Bangladesh, India, and Nepal, under the Paris Agreement in 2015 to reduce carbon emissions substantially or achieve a carbon-free economy by 2070. This commitment underscores the importance of transitioning from fossil fuels to renewable energy sources.


Related links

Bangladesh, India, Nepal near 'milestone' electricity trade deal

Nepal, India, and Bangladesh could reach first trilateral power agreement soon

India, Nepal, Bangladesh finalise tripartite power trade agreement draft

Landmark Power Trade Deal Between India, Nepal And Bangladesh To Reshape Energy Landscape In The Region

‘Bangladesh, India, Nepal power trade deal is transformative’


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