Nepal, Bangladesh agree to develop hydropower projects with bilateral investment

Nepal and Bangladesh officials hold a discussion during the energy secretary-level meeting that concluded in Kathmandu, on Tuesday. Image courtesy: Embassy of Bangladesh in Nepal

Nepal and Bangladesh have agreed to develop hydropower projects with government-to-government investment at an energy secretary-level meeting in Kathmandu on Tuesday, The Kathmandu Post reported. The electricity produced from the projects will be exported to Bangladesh.

Both countries also agreed on a joint technical team to identify potential hydropower projects for development, the report stated.

The joint team will pick out bankable projects and recommend them to the respective governments, according to a high Energy Ministry official who participated in the meeting quoted in the report.

“The two governments will then construct the project with bilateral investment,” said the official on condition of anonymity, the report said.

Bangladesh has consistently expressed interest in developing hydropower projects in Nepal. Both countries have also signed an agreement more than two years ago to develop several hydropower plants capable of generating more than 1,600 MW, the report stated.

The agreement was not able to move forward due to lack of coordination between the Commerce and Energy ministries. “The joint team will explore the possibility of executing these two projects along with a few others under bilateral investment,” said the official, quoted in the report.

Apart from developing the projects with government-to-government investment, the meeting also discussed the possibility of power trade between the two countries via Indian territory. “The participants discussed using Indian transmission lines to conduct power trade between the two countries,” said the official. “The two parties agreed to form a trilateral committee including India to make this happen.”

Bangladesh has signed a memorandum of understanding with India’s NTPC Vidyut Vyapar Nigam (NVVN) to import electricity generated by the Upper Karnali Hydropower Project being developed with Indian investment, according to the report.

In August, Nepal and Bangladesh formed a bilateral energy secretary-level joint steering committee after signing an energy sector cooperation agreement. The accord allows the two countries to initiate power trading besides tapping foreign direct investment from Bangladesh for the development of hydropower projects in Nepal, the report said.

The pact signed with Bangladesh will benefit Nepal only if they succeed in getting India on board as they have to use Indian territory to conduct electricity trade, said energy sector experts, as per the report.

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