As the protest intensified, Bangladesh sent a letter in the first week of July asking to move the date of the agreement, then the dialogue was going on between Kathmandu and Dhaka to reach an agreement by the end of August, but it was also stopped due to the political developments in Dhaka.
Kathmandu — Due to the recent political developments in Bangladesh, the 40 MW electricity sale agreement has become uncertain. Prime Minister Sheikh Hasina resigned and left the country on Monday after student protests against special reservations in government services intensified.
An interim government is now forming in Bangladesh amid ongoing political confusion. This instability has halted the agreement involving Nepal, India, and Bangladesh for the purchase and sale of 40 megawatts of electricity. Initially, the agreement was to be signed on July 28, but due to escalating protests, Bangladesh requested to postpone the date. Negotiations continued into August but ceased with the political developments in Dhaka.
Earlier, it was decided to sign the electricity sale agreement on July 28. However, as the protests intensified, Bangladesh sent a letter in the first week of July requesting to postpone the agreement date. Subsequently, discussions were ongoing between Kathmandu and Dhaka to finalize the agreement by the end of August. But these talks have been halted due to the political developments in Dhaka.
Since any agreement depends on the new government, the final decision regarding the purchase of 40 MW of electricity is uncertain. However, ministry sources have indicated that the change in government will not have much impact because Bangladesh needs electricity and Nepal needs to sell electricity. “Bangladesh needs electricity and Nepal needs to sell electricity. Therefore, we believe that even if the government changes, there will be no policy departure,” the source said. “Given the current situation in Bangladesh, there is no possibility of an agreement right now. It is a situation where nothing can be said.
On june 11, Bangladesh’s Cabinet Committee on Public Procurement (CCGP) approved the price of electricity to be imported from Nepal. The Bangladesh Power Development Board (BPDB) informed the authority on June 23 that, after evaluating the submitted bid documents and receiving approval from the relevant agencies, it had issued a letter of intent to accept the bid.
he authority also sent a letter accepting the bid in response. Shortly after, BPDB sent the draft electricity sale agreement to the authority. Upon receiving the draft, the authority set the date for signing the agreement on July 28 and sent an invitation to BPDB on July 10. However, due to the current situation in Bangladesh, the agreement could not be finalized on the scheduled date. The agreement is now uncertain.
According to the purchase agreement, the contract for the sale and purchase of 40 MW of electricity was to be signed by Aug 2. The authority sent a letter requesting to postpone the agreement date from Aug 28 and has also sent a request to extend the signing date by 120 days, as per the bid terms.
“The authority has already sent a letter to BPDB requesting an extension of the bid validity period by 120 days,” said Kulman Ghising, the Managing director of the authority. “The bid invitation was only valid until August 2, which is July 18. Therefore, we sent a letter to extend the time to keep the procurement process as is.”
Although the authority sent a notification to extend the signing date of the agreement, there has been no response from BPDB. Managing Director Ghising mentioned that despite the uncertainty of the agreement, there is still a possibility of exporting electricity if the agreement can be finalized within the next two months. “Although the agreement is currently uncertain, if we reach an agreement within the next two months, we can export electricity,” he said.
The Electricity Authority has an agreement to sell electricity to Bangladesh for five months during the rainy season, from June 15 to November 15 each year. A total of 144,000 megawatt-hours of electricity will be exported over these five months. The authority will receive USD 6.40 per unit for the electricity sold in Bangladesh. The authority has indicated that it expects to earn USD 9.216 million during these five months.
The authority will receive the price for the electricity exported to Bangladesh at the Muzaffarpur point in India, via the first international Dhalkebar-Muzaffarpur 400 kV transmission line between Nepal and India. This means that the electricity meter for the export to Bangladesh will be located in Muzaffarpur. The authority will bear the technical losses of the transmission line from Dhalkebar to Muzaffarpur. From Muzaffarpur, the electricity will reach Bangladesh through the 400 kV transmission line via Behrampur (India) to Bhedamara (Bangladesh).
The authority is preparing to export electricity produced from the 25 MW Trishuli hydropower project, which was constructed with Indian grant and is under its ownership, as well as from the 22 MW Chilime hydropower project, which was built through a subsidiary company. Both projects have already received approval for electricity exports to India.
On January 1, 2024, BPDB issued a tender for the purchase of 40 MW of electricity produced in Nepal, as per the tripartite agreement between Bangladesh, India, and Nepal, for a period of five years. The authority submitted the bid documents, including the proposed rate for the electricity to be sold, in the prescribed format during the second week of Magh. Subsequently, a discussion took place between the authority’s team and the bid evaluation committee under BPDB in Dhaka on February 22.
Nepal proposed a price of 6.70 US cents per unit for electricity. During the meeting, an agreement on the price could not be reached as Nepal insisted on not selling at a lower price than what it sells to India. However, later, during a bilateral discussion at the SAARC energy secretary-level meeting organized by the World Bank in Singapore, Bangladesh agreed to purchase electricity at a slightly reduced price of 6.40 US cents as proposed by Nepal.
On December 6, 2023, the Economic Affairs Committee of Bangladesh’s Cabinet granted in-principle approval for the import of 40 MW of electricity from Nepal. Accordingly, Bangladesh sent a letter to Nepal requesting a sales proposal, prioritizing the price. The authority submitted the sales proposal during the second week of Jan.
Source: Kantipur
