Nepal and Bangladesh unable to find common ground on electricity rate

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Nepal and Bangladesh - Electricity transmission line electricity production export electricityAlthough there were positive talks between Nepal and Bangladesh, an agreement on the rate could not be reached.

Kathmandu, February 23

The team led by the Managing Director of Nepal Electricity Authority, Kulman Ghising, failed to reach an agreement during negotiations with the Bangladesh Power Development Board to establish the rate of electricity sales. On Thursday, a business negotiation took place between the two parties in Dhaka, the capital of Bangladesh, aimed at setting the rate for the sale of 40 megawatts of electricity.

Pradeep Kumar Thike, deputy managing director at the NEA, told Onlinekhabar that although there were positive talks between Nepal and Bangladesh, an agreement on the rate could not be reached.

The Bangladesh board had issued a call for competitive tenders for the purchase of electricity from Nepal. However, as the electricity export permit from Nepal is exclusively granted to the NEA, only its proposal was presented.

The Authority had offered to export electricity to Bangladesh at around 7 cents per unit. However, Bangladesh proposed a reduction in that rate.

“We communicated that the rate quoted by us was ‘non-negotiable,’ but they needed to take it into consideration,” said Thike.

Thike said the Authority told Bangladesh it was not willing to export electricity at a lower rate than what it is currently exporting to India. Recently, an agreement was reached with India to export 200 megawatts of electricity at INR 5.25 per unit (Rs 8.50).

“We have communicated our point of view well. They have taken it positively,” he said.

According to the Authority, the electricity generated from the 23 MW Trishuli and 19 MW Lower Modi hydropower projects will be sold to Bangladesh.

Previously, Bangladesh had decided to import 40 MW of electricity from Nepal. On December 6, 2023, the Economic Affairs Committee of the Council of Ministers, led by Bangladesh Finance Minister Mustafa Kamal, approved the proposal from the Bangladesh Power Development Board to import 40 megawatts of electricity.

Thike also mentioned that Bangladeshi representatives have assured the Authority to make a decision on the rate and establish a bilateral agreement within the next few weeks.

“Other aspects of the agreement between Nepal and Bangladesh have already been settled. The draft has been exchanged accordingly, and an agreement will be formalised as soon as the issue of rates is resolved,” Thike said.

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