Bangladesh asks Nepal to negotiate tariff for 40MW power - Kathmandu Post reports

Bangladesh has sent a draft request for proposal to Nepal Electricity Authority (NEA) asking to propose tariff for export of 40MW of electricity from the Himalayan nation, The Kathmandu Post reports.

"Bangladesh has sent us a draft request for proposal (RfP) in which we propose the tariff that we want to levy," the Nepali daily reports quoting NEA managing director Kul Man Ghising.

With the latest development, the two countries are one step closer to a deal for the import of 40MW of electricity from Nepal. Once the two sides agree on tariff, Nepal, Bangladesh and India are expected to sign a tripartite agreement under which Bangladesh import power from Nepal for the first time.

During Nepali Prime Minister Pushpa Kamal Dahal's visit to India in May-June last year, the country had promised to facilitate the export of 40MW electricity to Bangladesh. As the Indian territory lying between Nepal and Bangladesh, it is necessary for both sides to take India on board in the energy trade, reports The Kathmandu Post.

Even though the two sides have agreed on almost all issues concerning the export of 40MW of electricity, tariff is the only thing on which negotiation is yet to begin, according to NEA officials.

They said that once Nepal proposes a tariff, bilateral negotiation would begin on the issues.

 "It may take 10 to 15 days for us to decide on the tariff to be proposed," NEA managing director Ghising said.

The NEA officials said the draft RfP was received early this week.

Pradeep Kumar Thike, deputy managing director of NEA, who oversees power trade said bilateral agreement on power trade has so far been in the form of a memorandum of understanding.

"With the RfP, understanding will be formalised in concrete terms and conditions."

Bangladesh and Nepal agreed to make an effort for the import of 40MW of power in the last summer season that began in May last year. But the plan has yet to materialise as the two sides failed to conclude negotiations.

Nepal now expects to export power in the next summer season as the country itself may have to import power from India during the winter season as it usually does, according to the Nepali daily.

As a friendly gesture, Nepal plans to offer a reasonable tariff for the government-to-government deal, Ghising told the Post earlier. "A reference can be the existing electricity price in Bangladesh," he said.

According to NEA officials, the transmission charges and service fees to be paid to the Indian authorities have been almost finalised. The transmission charges will be equivalent to what India's power traders currently charge buyers and levied as per India's open access rules.

Bangladeshi entities may also have to pay service charges to the NTPC Vidyut Vyapar Nigam Limited (NVVN), which is India's nodal agency for cross-border power trade, for the agency's efforts in obtaining its government's regulatory approval, according to the report.

When vital parameters, including the tariff, are determined, a tripartite agreement between the NEA, the Bangladesh Power Development Board and the NVVN will be signed as agreed during the meeting of the energy secretary-level joint steering committee between Nepal and Bangladesh in mid-May last year.

Nepal has not exported power to other countries except India. Both Nepal and India agreed, in principle, to involve Bangladesh as a partner for energy cooperation when they issued the Joint Vision Statement on Power Sector Cooperation in April 2022.

Addressing an event in Nepal on Tuesday, Bangladeshi Ambassador to Nepal Salahuddin Noman Chowdhury said that his country's existing generation has not been enough to meet the growing demand for power and Nepal could fill that gap, The Post reports.

"Currently, Bangladesh produces around 25,000MW of electricity against the demand of over 30,000MW," said Chowdhury. "If Nepal gives us 3,000–4,000MW of power right now, we can consume all the supply."