Editorial: Power export to Bangladesh

The Cabinet Committee on Government Purchase of Bangladesh has approved a proposal to import 40 MW of hydropower from Nepal.  Bangladeshi officials say the two countries are likely to sign the final agreement on energy trade during their Prime Minister Sheikh Hasina’s visit to Nepal. This marks a stepping stone toward unlocking the vast potential for energy cooperation between the two South Asian nations.

While Nepal, as per a study conducted decades ago, has hydropower potential of over 80,000 MW, generation of about 42,000 MW is considered economically viable. However, only a fraction of this potential has been harnessed so far. By tapping into this renewable energy source, Nepal can not only meet its domestic energy demands but also become the largest exporters of clean energy in the region. Bangladesh is grappling with a growing energy demand, thanks to its burgeoning economy and rapid urbanization. Import of hydropower from Nepal presents a win-win solution for both countries. While it opens up new avenues for revenue generation for Nepal, contributing to economic growth and narrowing down its trade, Bangladesh can diversify its energy mix, reduce its reliance on fossil fuels and mitigate the environmental impact of its energy consumption. Bangladesh currently imports 2,600 MW from India, including 1,500 MW from Adani Group’s coal-fired plant in Jharkhand.

While the quantum of import is small, it paves the way for larger and more ambitious energy trade agreements between the two South Asian neighbors. Bangladesh has shown interest to develop a hydropower project of around 500 MW in Nepal. Talks are underway to jointly develop the Sunkoshi-3 hydropower project (683 MW) in Kavre by also involving India. The fifth meeting of the secretary-level Joint Steering Committee on energy cooperation between Nepal and Bangladesh held last year decided that the NEA and Bangladesh Power Development Board (BPDB) would sign a joint venture agreement within the next six months to develop the project. There, however, has been no further development in this direction.

To fully capitalize on this opportunity, Nepal must address the infrastructural and regulatory challenges that have hindered the development of the hydropower sector. India's support is crucial in facilitating electricity transmission as Nepal and Bangladesh are not connected by land. Collaboration among these three nations could unlock the true potential of cross-border energy trade, thereby fostering economic growth and regional integration.