In a first, Nepal exports electricity to Bangladesh via Indian power grid

NEW DELHI: Nepal exported electricity to Bangladesh through the Indian power grid for the first time on Friday, marking the operationalisation of a tripartite arrangement that has been in the works for almost two years and is meant to forge energy connectivity.
The power from Nepal to Bangladesh was jointly inaugurated by Union power minister Manohar Lal, Bangladesh’s de facto power minister Muhammad Fouzul Kabir Khan, and Nepal’s energy minister Dipak Khadka during a virtual event hosted by Nepal’s ministry of energy, water resources and irrigation.
The three countries initiated talks on the arrangement in 2022 following a long-standing request from Nepal to the Indian side about using India’s national power grid to export electricity to Bangladesh.
Nepal, which has a surplus of hydropower, found a buyer in energy-deficient Bangladesh. The tripartite power trade arrangement is the first of its kind in South Asia.
“This historic occasion marks the first trilateral power transaction which has been carried out through the Indian grid,” the external affairs ministry said in a statement.
The Indian government announced its decision to facilitate the trilateral power transaction from Nepal to Bangladesh, through the Indian grid, during the visit of former Nepalese premier Pushpa Kamal Dahal “Prachanda” to New Delhi in May-June 2023. At the time, officials said the deal would cover the export of up to 40 MW in the initial stage.
During Dahal’s visit, India and Nepal expressed their commitment towards greater sub-regional cooperation, including in the energy sector, which would lead to increased inter-linkages between the economies of regional countries for the mutual benefit of all stakeholders, the statement said.
On October 3, India’s NTPC Vidyut Vyapar Nigam, Nepal Electricity Authority and the Bangladesh Power Development Board signed a tripartite power sales agreement in Kathmandu. This agreement paved the way for the operationalisation of the tripartite power trading arrangement.
“The start of this power flow from Nepal to Bangladesh through India is expected to boost sub-regional connectivity in the power sector,” the statement said.
People familiar with the matter said on condition of anonymity that Bangladesh will pay Nepal for the electricity it imports, while the Indian side will receive a transit fee for the use of its national power grid.
Energy connectivity is a key part of India’s plans to forge greater trade and investment linkages with other countries in the neighbourhood. The Indian side has helped build pipelines to both Nepal and Bangladesh for the speedy and cheaper transportation of petrol and diesel.
During Dahal’s visit last year, New Delhi and Kathmandu also reached an agreement on long-term power trade, whereby India will import 10,000 MW from Nepal in the next 10 years. India currently imports about 450 MW from Nepal and there is a proposal to increase this by 1,200 MW.