Nepal has made headlines by beginning its export of electricity to Bangladesh through India's network, marking a significant milestone in regional energy cooperation. This inaugural power supply, which kicked off on November 16, 2024, saw Nepal sending 40 megawatts (MW) of electricity, showcasing the potential of renewable energy resources across borders. The historic event was celebrated during a virtual ceremony attended by notable officials from all three nations, including Nepal's Minister of Energy, Water Resources, and Irrigation, Dipak Khadka, India's Union Minister for Power, Manohar Lal Khattar, and Bangladesh's Energy Adviser, Muhammad Fozlul Kabir Khan.
This initial power transfer is part of a broader tripartite agreement signed on October 3, 2024, which includes the Nepal Electricity Authority (NEA), the Bangladesh Power Development Board (BPDB), and India's NTPC Vidyut Vyapar Nigam (NVVN). The arrangement not only enhances energy security but is also seen as fostering sub-regional cooperation amid Bangladesh’s current electricity crisis, exacerbated by challenges at domestic power plants and reduced generation from India’s Adani power plant.
The need for such cooperation is pressing; Bangladesh has been struggling with electricity shortages, grappling with both political instability and maintenance issues at its Payra thermal power plant. The introduction of Nepal's hydroelectric power is perceived as a timely relief. Advisor Khan emphasized the strategic advantage of sourcing electricity from Nepal, located just 40 miles away, and touted the partnership as contributing significantly to economic growth and sustainability.
For Nepal, the ability to export electricity opens new revenue streams, especially considering its vast untapped hydroelectric potential. Minister Khadka articulated his optimism about this new venture, stating, "The export of electricity from Nepal to Bangladesh via India has created more hope in the energy sector. By utilizing the water resources here to produce electricity, we can earn foreign currency." This project signals Nepal's shift from being energy-deficient, plagued by load-shedding issues, to now becoming a power surplus nation with budding ambitions for international energy trade.
The electricity is transmitted from the NEA through India's existing grid infrastructure, following the pathway from the Dhalkebar-Muzaffarpur transmission line to the Brahmapur-Bhedamara connection leading to Bangladesh. According to Kulman Ghising, the NEA's Managing Director, the annual exports to Bangladesh are projected at 14.4 million units.
Looking beyond immediate transactions, both Nepal and Bangladesh anticipate significantly bolstering their energy collaboration. Bangladesh, which has set ambitious goals with plans to import as much as 9,000 MW of electricity by 2040, views this agreement as foundational. The energy relationship aims to facilitate broader discussions on creating a South Asian energy grid, potentially uniting power sectors from India, Nepal, Bhutan, and Bangladesh.
Both countries are motivated by economic needs and ambitious clean energy goals. Bangladesh has committed to reducing its carbon emissions and sees renewable energy integration as integral to its sustainable development strategy. With fossil fuel resources limited and reliance on imports deemed unsustainable, the hydropower sector presents appealing options for both nations.
During the hangouts and discussions surrounding this breakthrough, Indian Minister Khattar praised the use of India's transmission infrastructure to expand energy access among neighboring countries. He affirmed his country's commitment to continuing support for Nepal's hydropower projects, signifying India's role as not only a facilitator of trade but also as a regional partner invested in collaborative energy strategies.
Adding to the high expectations, the NEA has plans to capitalize on the surplus electricity produced during monsoon seasons when demand usually dips. This surplus is typically available for export to both India and Bangladesh, maximizing the utilization of Nepal's hydroelectric capabilities.
Dealing with the financial aspects, Bangladesh will purchase electricity from Nepal at 6.40 US cents (approximately 8.64 Nepali rupees) per unit. There's also a transactional layer where Bangladesh compensates India with 0.059 Nepali rupees per unit for using their transmission lines—a fair rate considering the infrastructure involved.
On the domestic front, electricity production is expected to rise as Nepal continues to develop its hydroelectric projects. The government has ambitious goals set for 2026 to boost its installed capacity from the current 3,300 MW to 5,000 MW. Private sector investment is also being attracted to bridge the gap between the aspiration for surplus and actual production through significant hydropower projects like the upcoming Sunkoshi 3 and Upper Karnali Hydropower Projects.
While the fabric of this energy collaboration is just beginning to be woven, it promises not just economic benefits but also increased energy independence for both Nepal and Bangladesh. The synergies formed through this partnership could set the stage for advanced cooperation across South Asia, enhancing economic resilience and creating new avenues for trade and investment. Conversations about energy cooperation highlight the strategic advantages of regional integration, paving the way for more renewable energy initiatives across borders.
With this inaugural export, both Nepal and Bangladesh embrace the opportunity to lead by example. Their collaboration stands to inspire similar initiatives across the region, potentially transforming South Asia’s energy economy and fostering sustainable development goals. The realization of these ambitious energy projects will be pivotal as both countries strive toward shared prosperity and green energy futures. The world will be closely watching how this tri-nation partnership evolves, with hopes of creating lasting impacts on the energy security and environmental well-being of the subcontinent.
