In August 2018, Nepal and Bangladesh signed a memorandum of understanding (MoU) on cooperation in the energy sector. The agreement also facilitated the creation of a Joint Working Group (JWG) and a Joint Steering Committee (JSC).
It's been one year since talks for electricity exports from Nepal to Bangladesh gained momentum. Nepal's quest for finding a market for its electricity beyond India was further emboldened after Bangladesh expressed readiness to import 40-50 MW of power from Nepal during the energy secretary-level JSC meeting of the two countries held in Kathmandu in the last week of August. With India giving its nod for power exports from Nepal to Bangladesh in the recently concluded Nepal-India Energy Secretary Talk, the Nepal Electricity Authority (NEA) has initiated the process. NEA has planned to export electricity from the Likhu-4 Hydropower Project to Bangladesh and sent the proposal to India for approval. With no bilateral agreement for power trade between Nepal and Bangladesh, the energy ministry officials said the proposal of PTA will be proposed in the upcoming meeting. "We are planning to export 40-50 MW of electricity to Bangladesh in the upcoming season but both countries are yet to sign a PTA," said the official, "That's why we will propose signing PTA in the next meeting." Once the PTA is signed, there will be a power purchase and sales agreement between NEA and the Bangladesh Power Development Board which will enable Nepal to export power to Bangladesh. With Bangladesh keen on importing electricity from Nepal as well as developing hydropower projects in Nepal on a joint-venture model, Nepali officials will also discuss the potential Bangladeshi investments in the energy sector in Nepal. Bangladesh has already said that it would invest in the 683MW Sunkosi-3 Hydropower Project. Both sides had agreed to form a joint-venture company to develop the hydroelectric project. Energy ministry officials said the construction of a dedicated cross-border transmission line between Nepal and Bangladesh will also feature in the meeting. They said while Nepal will use the Indian transmission infrastructure to export power to Bangladesh for now, a dedicated transmission line will be required for the longer run. After the last JSC meeting in August 2022, Nepal and Bangladesh also agreed to take initiatives to reach a tripartite agreement between Nepal, Bangladesh and India to set up a dedicated transmission line between Nepal and Bangladesh using the Indian territory.
