Nepal, Bangladesh to sign MoU on energy cooperation today

Kathmandu, August 9

Nepal and Bangladesh are going to sign a memorandum of understanding for ‘power sector cooperation' tomorrow to intensify the bilateral engagements for power sector development.

Minister of Energy, Water Resources and Irrigation Barsha Man Pun and his Bangladeshi counterpart Minister of Power, Energy and Mineral Resources Nasrul Hamid will sign the agreement tomorrow, according to Joint Secretary of MoEWRI Dinesh Kumar Ghimire. “The MoU will set up the mechanisms through which both countries will be able to move towards deepening the cooperation in power sector.”

The MoU will set up a power secretary-level joint steering committee and joint secretary-level joint working group, which will meet every year, and discuss and take forward the issues related to the cooperation in power sector.

“It is a general MoU on energy cooperation. Through this, both the countries will strive towards cooperation in hydroelectricity, solar, wind and other sources of power by setting up bilateral mechanisms,” said Mashfee Binte Shams, ambassador of Bangladesh to Nepal. “The joint mechanisms will start working on specific areas, sharing information and exploring the opportunities for investment in solar, hydropower and power grid transmission line to materialise the cooperation in power sector over the period.”

Nepal and Bangladesh had started talking on bilateral energy cooperation since the power trade agreement (PTA) was signed with India in 2014. Nepal has identified Bangladesh as a prospective market for hydroelectricity, which is a clean and renewable source of energy.

Following the ‘SAARC Framework Agreement for Energy Cooperation (Electricity)' among the SAARC member states in November 2014, Nepal and Bangladesh have seen the prospects of bilateral power cooperation. However, to materialise power trade and power cooperation between the two nations, Nepal and Bangladesh need to hold talks with India. As there is power trade between Nepal and India, and also Bangladesh and India, power trade between Nepal and Bangladesh is not a far-fetched notion as cross-border power trade infrastructure between Nepal-India and Bangladesh-India are already in place, according to Ambassador Shams.

There is prospect of energy trade between Nepal and Bangladesh as GMR Energy India has signed MoU to sell power produced from Upper Karnali Hydropower Project, which is going to be developed under Indian investment, to Bangladesh. For this purpose, an initial MoU regarding connection agreement has already been signed with Bangladesh Power Development Board (BPDB) during the visit of Bangladeshi Prime Minister Sheikh Hasina to India in April 2017.

Bangladesh's current electricity generation stands at around 16,000 megawatts and it will require around 34,000 megawatts of power by 2030 to sustain the high economic growth of above seven per cent. This is why Bangladesh is keen to purchase hydroelectricity, which is clean, renewable and reliable source of energy from Nepal. However, a trilateral agreement among Nepal, India and Bangladesh is a must to use the power grid transmission line in India.