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Nepal-India-Bangladesh talks on power trade long overdue

   December 10, 2019        296        Pralhad Rijal

Kathmandu- A planned tripartite meeting between Nepal, India and Bangladesh to fix the terms for power trade is still in limbo as there has been no word for the past two months from the Indian External Affairs Ministry which has proposed to host it.

Nepal is in line to produce surplus electricity which would be exported to energy-starved Bangladesh using Indian transmission lines, so what officials are essentially planning is a three-way tango.

Nepali officials said they were waiting for correspondence from India, and that it was not certain when the meeting would take place. They would not say what was causing the delay, but there are concerns that the ongoing boundary row between Nepal and India might be the reason.

Soon after the October meeting between Nepali and Indian energy officials, Nepal’s Energy Ministry had said that the Indian side was positive on holding a tripartite discussion within three months to resolve matters pertaining to allowing Nepal and Bangladesh to use the Indian grid for electricity trade.

But that was before the revival of the outstanding border dispute between the two neighbours. Now, Energy Ministry officials say there has been no development on when and where to hold the talks involving Bangladesh.

“We have not yet received any correspondence from our Indian counterparts about the proposed meeting,” said Prabin Raj Aryal, spokesperson for the Ministry of Energy, Water Resources and Irrigation. “Even if there have been some internal developments, we are less aware of it and cannot say anything at this moment.”

According to Aryal, the meeting will be held sooner or later as it has been proposed by a firm mechanism between Nepal and India on cooperation in the power sector.

The proposed tripartite meeting, officials say, is expected to fix transmission modalities and commercial terms for the use of the Indian grid ,paving the way for direct power trade between Nepal and Bangladesh through India.

However, there are also differences over the modality of power trade through India which are yet to be resolved.

“We have proposed to trade electricity with Bangladesh in a cost-effective way by paying surcharges for using Indian transmission lines as fixed by Indian regulations rather than transacting power through an Indian commercial entity acting as an intermediary between Nepal and Bangladesh,” Dinesh Ghimire told the Post soon after the October meeting.

During the meeting, the Indian side had proposed to allow Nepal and Bangladesh to trade power indirectly through an Indian commercial entity.

Talk of tripartite discussions had surfaced four months after Nepal and Bangladesh decided to explore possibilities of using Indian transmission lines passing through the Siliguri corridor, also known as Chicken’s Neck, following amendments to cross-border energy trading regulations by India.

Both Bangladesh and Nepal have pledged to make their best efforts to devise trilateral arrangements at multiple past meetings.

Independent power producers, who visited Dhaka in May to lobby for including their market interests and concerns in the bilateral meetings between Bangladesh and Nepal, said that the meeting of the tripartite mechanism should not be delayed as it is the only way the country can secure a market for surplus electricity expected to be produced in Nepal.

“A pact between Nepal, Bangladesh and India would bring a paradigm shift in electricity trade, and it is imperative to realise the touted regional integration in the sector,” said Kumar Pandey, vice-president of the Independent Power Producers’ Association of Nepal. “Delays in holding such a crucial meeting would defer market prospects.”

According to Pandey, talks on exporting power to Bangladesh will not materialise unless the tripartite mechanism finds a firm footing and resolves current issues of market access for power producers in Nepal.

As per the Nepal Electricity Authority’s estimates, electricity generation in the country will surpass domestic power demand by around 1000 megawatts within a year, and by 8000 megawatts within the fiscal year 2025-26.

Energy-hungry Bangladesh is one of the fastest-growing economies and is seen as a lucrative market for the power produced in Nepal. The countries have already entered into agreements to trade 9000 megawatts of electricity over the course of a decade.

Amid the hold-up of the tripartite meeting, Nepal and Bangladesh are gearing up to hold a third secretary-level meeting on Cooperation in the Field of Power Sector.

“The Joint Technical Team of Nepal and Bangladesh is currently holding talks, and the secretary-level meeting is likely to take place in Nepal in December-end,” said Aryal.

The Kathmandu Post

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