Money

Energy Ministry looking for deal similar to GMR

  • Exporting electricity
- BIBEK SUBEDI, Kathmandu

Aug 23, 2018-

Inspired by the path-breaking deal reached by GMR Upper Karnali Hydropower to export electricity generated by plants in Nepal to Bangladesh through Indian territory, the Energy Ministry wants to ask the Nepal Electricity Authority (NEA) to sign a similar pact to export power produced by two projects in the government’s basket.

The ministry plans to export electricity generated by the 850 MW Upper Arun and 800 MW Dudhkoshi Storage hydropower projects to Bangladesh through India’s NTPC Vidyut Vyapar Nigam (NVVN).

According to a highly placed ministry source, it is looking for a deal similar to GMR.

NVVN and the Bangladesh Power Development Board (BPDB), a statutory body of the Bangladeshi government, have signed a memorandum of understanding (MoU) and are on track to sign a power purchase agreement which will allow Bangladesh to import electricity generated by the Upper Karnali scheme through the Indian power grid.

The Energy Ministry is planning to ask the NEA to initiate the process to sign an MoU with NVVN to export electricity generated by the two projects to Bangladesh. After signing the pact with NVVN, the NEA will sign another MoU with the BPDB, according to the highly placed source at the ministry.

If the ministry’s plan materialises, the NEA will supply electricity generated by the two plants into the Indian grid and NVVN will transmit it to Bangladesh. As Indian laws don’t allow power producers in Nepal to export electricity to third countries using Indian transmission lines, the modality will provide a way to trade electricity produced by hydropower projects in Nepal. The arrangement, according to the ministry official, will act as a guiding framework for Nepal to export surplus electricity to Bangladesh that Nepal is expected to produce in a few years. “However, we will also start negotiations with Indian authorities to allow us to sell electricity to Bangladesh directly using the Indian grid,” said the source.

Bangladesh promises to be a lucrative market for hydroelectricity produced in Nepal as it is an energy hungry nation and plans to import electricity from neighbouring countries to sustain the high economic growth rate that it has been achieving for the last few years.

According to experts, the price of electricity in Bangladesh is good compared to Nepal and India which will make a large number of hydropower projects in Nepal financially viable. A couple of

weeks ago, Nepal and Bangladesh signed an energy cooperation agreement with the aim of exploring the possibilities of initiating electricity trade between the two countries.

Published: 23-08-2018 08:53

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