After signing an energy cooperation agreement with China last month, the Ministry of Energy, Water Resources and Irrigation is preparing to conclude a similar pact with Bangladesh.
Bangladeshi State Minister of Power Nasrul Hamid is scheduled to make a three-day visit to Nepal starting August 9 to sign the deal.
Highly placed ministry sources said a memorandum of understanding would be signed to form a high-level mechanism to oversee electricity trade between the two countries and facilitate Bangladeshi investment in hydropower projects in Nepal.
“It has been some time since a high-level discussion was held between the two countries regarding energy trade and investment,” said the source. “If the joint mechanism is formed, it will be a wonderful platform to turn the discussion into reality.”
According to the ministry source, both countries have agreed to establish secretary and joint secretary-level mechanisms like the ones Nepal has formed with India.
The agreement with Bangladesh will pave the way to export surplus electricity that Nepal is expected to produce within a few years. Bangladesh has repeatedly shown interest in importing power from Nepal via India, and has raised the issue at the meetings of the sub-regional BBIN (Bhutan, Bangladesh, India and Nepal) Initiative which was signed by the four countries to facilitate regional trade and business.
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 in Nepal by India. As per the understanding, it will import 300-500 MW of energy from the project being executed by an Indian developer.
Apart from signing the memorandum of understanding, the two parties will explore ways to encourage Bangladeshi investments in several hydropower projects in Nepal during the minister’s visit to Nepal. Bangladesh has also shown interest in making investments in hydropower projects in Nepal.
Bangladesh first expressed interest in putting money in hydropower during the ninth South Asia Economic Summit it hosted in Dhaka last October.
The then commerce minister Romi Gauchan Thakali and his Bangladeshi counterpart Tofail Ahmed signed an agreement on the sidelines of the event to build two hydroelectric plants capable of generating over 1,600 MW of electricity in Nepal.
The proposed projects are the 1,110 MW Sunkoshi II and 536 MW Sunkoshi III on the Sunkoshi River in central Nepal. Both countries have agreed to develop the projects under the BBIN Initiative. As per the agreement, the energy produced by the Sunkoshi projects will be evacuated to Bangladesh via India through the BBIN economic corridor. However, no headway was made on this front.