Bangladesh to purchase power from Upper Karnali Hydel Project

DHAKA, BANGLADESH: Bangladesh is to purchase electricity from the Upper Karnali Hydropower Project of Nepal. The Bangladesh government some days back made a decision to purchase 500 megawatts power from the 900-megawatt project.

Bangladeshi Minister of State for Electricity, Energy and Minerals, Nasrul Hamid, informed Nepal's Minister for Energy, Water Resources and Irrigation Barshaman Pun that the Bangladesh Cabinet has taken a decision to purchase power from the Upper Karnali Project.

Minister Pun is currently on a visit to Bangladesh. At a programme organised by the Embassy of Nepal in Dhaka on Friday, he said, the Bangladeshi State Minister informed him that decision had already been taken about the power purchase and discussions were going on regarding purchase rate and other technical matters.

It is stated that project developers Grandhi Mallikarjuna Rao (GMR) Group will sell power to the NTPC, India's largest power distribution company and NTPC will sell it to Bangladesh.

GMR has not been able to manage the financing for the project as it is unable to secure market for selling the power generated from Upper Karnali Project. The second deadline given to GMR by Investment Board Nepal for the purpose is ending on September 18.

As per the Power Development Agreement (PDA) reached between the Board and GMR on September 19, 2014, financing for the project should have been managed within two years from the date of signing the PDA, which was September 19, 2016.

However, the Board has been extending the deadline due to the company's inability to manage finances for the project. The estimated cost of the project is Rs 150 billion.

Nepal will get 108 megawatts (12 per cent) power and 27 per cent equity from the Upper Karnali Project. The project has been modelled to run in full capacity for only three months of the year. It is being constructed under the build-own-operate-transfer (BOOT) model. As per the PDA, the project would be handed over to the government after 30 years.

Energy Minister Pun said that Bangladesh planned to buy 9,000 megawatts power from Nepal until 2040 AD. He added that the two countries are in discussion regarding purchase of around 1,500 megawatts electricity to be generated from Dudhkoshi and Upper Arun Hydropower projects of Nepal, by Bangladesh. The Energy Minister said these talks would also be concluded soon.

At the programme, he also urged the Bangladeshi government and investors to invest in the hydropower development sector of Nepal as political stability has been established in the country.

Meanwhile, two committees have been formed for the implementation of bilateral collaboration between Nepal and Bangladesh in energy sector. Nepal has already appointed the officials for the committees. It is learnt that Bangladesh has also finalised officials to be appointed for the same purpose.

Spokesperson of Ministry of Energy, Water Resources and Irrigation, Dinesh Kumar Ghimire, who is accompanying Minister Pun in the visit shared this information. Ghimire said, Nepal has proposed the meeting of the two committees for October in Kathmandu and Bangladeshi officials have responded that they would give information on this soon.