Nepal Agrees to Trilateral Energy Mechanism with Bangladesh and India

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Nepal, Bangladesh and India often discuss power trade, but they don’t have a mechanism to remove bottlenecks.

Nepal has agreed to Bangladesh’s proposal on establishing a joint trilateral mechanism at the highest bureaucratic levels among three countries, including India, to promote energy cooperation.

Nepal had received the Bangladeshi proposal in late November as three countries expressed their eagerness to promote cooperation in energy, particularly when it comes to widening the clean energy market in Bangladesh, Bhutan, India and Nepal (BBIN) sub-region of South Asia.

“We have sent our comments to the Bangladeshi side on its proposal,” said Nabin Raj Singh, spokesman at the Ministry of Energy, Water Resources and Irrigation. “We have agreed to almost all points of the proposal since it has cleared up most issues over the joint trilateral mechanism.”

As per the Bangladesh’s proposal, a trilateral Joint Working Group (JWG) and a Joint Steering Committee (JSC) headed by joint secretaries and secretaries of relevant ministries respectively will be established to promote cooperation in the power sector.

“The joint mechanism will promote energy cooperation among the three nations by removing bottlenecks,” said Singh. “Facilitating power trade among the three countries and developing transmission infrastructure for the purpose will be the key agenda to be addressed by the trilateral mechanism, as per the Bangladeshi proposal.”

There is no dispute on the mechanism’s proposed modality as similar mechanisms already exist at the bilateral levels.

Currently, Nepal has bilateral mechanisms for energy cooperation with both India and Bangladesh, while India and Bangladesh also have similar mechanisms aimed at ironing out any wrinkles in their bilateral energy cooperation.

Nepal’s two mechanisms with India are the joint secretary-level JWG and the secretary-level JSC. Both were established as per the agreement on ‘Electric Power Trade, Cross-border Transmission Interconnection and Grid Connectivity’ signed in October 2014.

Likewise, such mechanisms with Bangladesh were established based on a ‘Memorandum of Understanding on Cooperation in the Field of Power Sector’ between the two countries in August 2018.

Singh, however, added that he was unaware whether Bangladesh had sent a similar proposal to the Indian government.

Talks about the trilateral mechanism are taking place at a time when the three countries have been discussing power trade along with joint investment in Nepal’s hydropower plants.

For example, during Prime Minister Pushpa Kamal Dahal’s India visit in May-June, India had promised to help Nepal export 40MW of electricity to Bangladesh through its existing transmission infrastructure.

Earlier this month, New Age, a Bangladesh-based magazine, reported that the Bangladeshi government had approved import of 40MW from Nepal through the Indian grid under a direct purchase method.

Nepal Electricity Authority (NEA) officials, however, said they are yet to be officially notified about such a decision by the Bangladesh government. “Once we get formal approval from the Bangladeshi government, there will be discussions on the tariff rates,” said an NEA official.

Besides planned export of 40MW through Indian transmission infrastructure, Nepal and Bangladesh have agreed to work on establishing a dedicated transmission line for power trade between Nepal and Bangladesh, for which the southern neighbour’s cooperation is essential as Indian territory must be used for such a line.

Likewise, Nepal and Bangladesh reached an understanding to involve India for the development of the 683MW Sunkoshi-3 hydropower project, making the enterprise a trilateral venture. The understanding was reached during the JWG and JSC meetings held in Bangladesh in May as Indian cooperation would be vital to export electricity generated from the project to Bangladesh.

Nepal and Bangladesh have long been talking about developing this project, located on the border of Ramechhap and Kavrepalanchok districts of central Nepal.

Bangladesh has also issued a letter of intent to India’s GMR Group expressing its interest to enter a contract to purchase 500MW of electricity from the Nepal-based 900MW Upper Karnali Project.

In the April 2022 Joint Vision Statement on Power Sector Cooperation between Nepal and India, the two countries agreed to expand cooperation and include partner countries under the BBIN framework.

So far, Nepal, India and Bangladesh don’t have any trilateral mechanism to work on energy. Both Nepal and Bangladesh have been requesting the southern neighbour for such a mechanism, according to officials.

“The establishment of a trilateral mechanism will open the door for policy-level dialogue to promote cooperation among three countries,” Singh had earlier told the Post.

Source: The Kathmandu Post