The prospects for electricity trade between Nepal and Bangladesh are on the rise, with both countries showing interest in a mutually beneficial arrangement. Bangladesh has proposed importing surplus electricity from Nepal during the summer and monsoon seasons, while offering to supply electricity to Nepal during the winter when its power generation decreases. This proposal aligns with the seasonal variations in electricity production and consumption between the two countries, making it a win-win situation.
Previously, India had been reluctant to provide transmission access to facilitate electricity trade between Nepal and Bangladesh. However, India has now expressed its eagerness to promote sub-regional cooperation on energy with Nepal, Bangladesh, and Bhutan. Nepal and Bangladesh are also part of the Bangladesh, Bhutan, India, and Nepal (BBIN) framework, which aims to expand power sector cooperation among the partner countries.
The trade arrangement between Nepal and Bangladesh makes sense given their complementary energy needs. Bangladesh faces surplus energy during the winter when demand is low, while Nepal experiences power shortages due to low water levels in its rivers. Nepal, on the other hand, produces surplus energy during the summer and monsoon seasons when power demand in Bangladesh surges. By leveraging these seasonal variations, both countries can meet their energy requirements more effectively.
Bangladesh has recognized Nepal’s potential in helping it achieve its target of increasing the share of renewable and clean energy in its energy mix. Bangladesh has already committed to purchasing 500MW of electricity from the Upper Karnali Hydropower Project in Nepal, and it has shown interest in developing other hydropower projects in Nepal.
However, there are challenges to overcome for electricity trade between Nepal and Bangladesh. One of the main challenges is the lack of direct transmission infrastructure between the two countries. India can play a crucial role in facilitating connectivity between Nepal and Bangladesh by providing transmission access through its territory. Nepal and India are currently studying the feasibility of a cross-border transmission line between Nepal and West Bengal, which could potentially enable electricity trade between Nepal and Bangladesh.
In addition to transmission connectivity, there is a need for harmonized rules and regulations among the participating countries in the BBIN framework. Multilateral agreements on details such as the wheeling charge of electricity will be essential for successful energy trade in the sub-region.
Overall, the increasing prospects for electricity trade between Nepal and Bangladesh present an opportunity for both countries to meet their energy needs more efficiently and promote regional cooperation in the power sector. With the support of India and the establishment of necessary infrastructure and agreements, this trade arrangement can become a reality, benefiting all parties involved.