The Bangladesh Power Development Board (BPDB) has corresponded with Nepal Electricity Authority (NEA), calling to proceed with the signing of a power trade agreement.

The Bangladeshi power authority sent a letter to the NEA requesting that they sign an agreement to sell 40 MW of electricity, informing it that the bid submitted by the NEA has been approved by the concerned authorities, according to a report of Kathmandu Post published on Tuesday.

On January 1, 2024, the BPDB called for bids to purchase 40 megawatts of electricity produced in Nepal for five years under a tripartite agreement among the authorities of Bangladesh, India, and Nepal.

NEA had submitted bid-related documents, including the electricity rate to be sold. After evaluating these documents and obtaining approval from the relevant authorities, the BPDB informed the NEA of its intention to proceed with signing a power trade agreement.

The NEA must provide BPDB with written notice of bid acceptance within seven working days. Subsequently, BPDB will furnish the authority with a draft of the electricity sales agreement. The agreement must be finalised within 28 days of receiving the draft. A tripartite agreement will be signed among the NEA, NTPC Vidyut Vyapar Nigam (NVVN) of India, and BPDB.

Kulman Ghising, managing director of NEA, said the work has already commenced to export electricity to Bangladesh starting from this monsoon season. “The agreement will be finalised soon as all three bodies have agreed on the draft of the tripartite electricity sales agreement,” said Ghising.

“After that, we will submit the list of projects for approval to export electricity to Bangladesh to India’s central electricity authority. Since obtaining approval for new projects takes time, we plan to propose exporting electricity produced from projects that have already received approval for electricity export to India.” Earlier in June, a meeting of the ‘Cabinet Committee on Government Purchase’ in Bangladesh approved a proposal to import 40 megawatts of electricity from Nepal.

The NEA will sell 40 megawatts of electricity to Bangladesh in US dollars during the six months of the monsoon season each year, from June 15 to November 15, for five years. The authority will receive 6.40 US cents per unit of electricity sold to Bangladesh.

The delivery point will be a 400kV substation at Muzaffarpur in India, and Bangladesh will pay the transmission charge for using the Indian transmission infrastructure. The date of a final agreement between Nepal and Bangladesh on the matter has yet to be finalised. Nepal and Bangladesh had agreed to sign a tripartite agreement involving the NEA, the BPDP and the NVVN during the meeting of the energy secretary-level joint steering committee in May 2023.

Earlier in February, Bangladesh had sent a draft request for proposal (RfP) in response to which Nepal had proposed the tariff. Besides tariff, Nepal had also included details on how Nepal would deliver power to Bangladesh. The two countries agreed on the trading amount on the sidelines of the SAARC Energy Centre’s secretary-level meeting held in Singapore from February 23 to 26, 2024.