February 25, Kathmandu.
A joint meeting between the Nepal Electricity Authority (NEA) and the Bangladesh Power Development Board (BPDB) in Dhaka last week could not open up a way for cross-border hydropower trade.
In response to Bangladesh’s queries on tariff rates, the NEA proposed a tariff rate between 8.96 Nepali rupees (0.067 USD) and 9.28 rupees (0.070 USD) per unit for power trade with Bangladesh. Bangladesh did not agree on the tariff rate, which is slightly higher than the 8.40 Nepali rupees (0.063 USD) per unit agreed by Nepal and India in a five-year power purchase agreement last year. However, the NEA has not given up on the bilateral talks. The communication between Nepal and Bangladesh on the 40 Mega Watts cross-border power trade is in the positive direction, according to the authority.
Last year, Nepal, India, and Bangladesh agreed on the cross-border power supply from Nepal to Bangladesh using a transmission line in India. Surge in tariff rates for Bangladesh stems from the transmission line charges levied by India.
In an economy which is increasingly relying on remittance to tackle the trade deficit, the prospect of power trade has opened up a new chapter. Multiple sources indicate that Bangladesh is short of about 5,000 Mega Watts of energy. But long-term prospects for Nepal are more lucrative. Bangladesh has set a long-term goal of sourcing 9,000 Mega Watts of electricity from Nepal by 2040.
Nepal started selling electricity to India in 2022. This January, India and Nepal signed a bilateral agreement on exporting 10,000 Mega Watts of electricity from Nepal to India in the following ten years. However, Nepal is yet to extend beyond India in power trade.