Nepal and Bangladesh agreed to develop hydropower projects with government-to-government investment at an energy secretary-level meeting that concluded in Kathmandu on Tuesday.

The electricity produced by these schemes will be exported to Bangladesh. The two countries also decided to form a joint technical team to identify potential hydropower projects for development.

The joint team will pick out bankable projects and recommend them to the respective governments, according to a high Energy Ministry official who participated in the meeting.

“The two governments will then construct the project with bilateral investment,” said the official who asked not to be named.

Bangladesh has repeatedly expressed interest in developing hydropower projects in Nepal. The two countries even signed an agreement more than two years ago to develop several hydropower plants capable of generating more than 1,600 MW.

The then commerce minister Romi Gauchan Thakali and his Bangladeshi

counterpart Tofail Ahmed signed the pact on the sidelines of the ninth South Asian Economic Summit in October 2016 to execute the 1,110 MW Sunkoshi II and 536 MW Sunkoshi III located on the Sunkoshi River in central Nepal.

The plan failed to move forward due to lack of coordination between the Commerce and Energy ministries. “The joint team will explore the possibility of executing these two projects along with a few others under bilateral investment,” said the official.   

Apart from developing the projects with government-to-government investment, the meeting also discussed the possibility of power trade between the two countries via Indian territory. “The participants discussed using Indian transmission lines to conduct power trade between the two countries,” said the official. “The two parties agreed to form a trilateral committee including India to make this happen.”   

The Bangladeshi side informed the Nepali delegation about the headway made by Bangladesh to import 500 MW of electricity from the 900 MW Upper Karnali Hydropower Project being built by an Indian joint venture company.

“They said that they were close to signing a power purchase agreement with the developer,” said the official.

Bangladesh has signed a memorandum of understanding with India’s NTPC Vidyut Vyapar Nigam (NVVN) to import electricity generated by the Upper Karnali Hydropower Project being developed with Indian investment.

Nepal and Bangladesh formed a bilateral energy secretary-level joint steering committee after signing an energy sector cooperation agreement in August. The accord allows the two countries to initiate power trading besides tapping foreign direct investment from Bangladesh for the development of hydropower projects in Nepal.

The pact signed with Bangladesh will benefit Nepal only if they succeed in getting India on board as they have to use Indian territory to conduct electricity trade, said energy sector experts.