KATHMANDU: The Bangladesh Power Development Board (BPDB) has written to the Nepal Electricity Authority (NEA) to enter into an agreement for the purchase and sale of 40 megawatts of electricity produced in Nepal. BPDB sent a letter to the NEA on Monday, informing them that the concerned authority has agreed to the tender for the Power Sales Agreement (PSA) for 40 megawatts of electricity for six months during the rainy season.

BPDB had called for a tender bid on January 1, 2024, for the purchase of 40 megawatts of electricity produced in Nepal, in accordance with the tripartite agreement between the entities of Bangladesh, India, and Nepal for a period of five years. The NEA submitted the tender document in the prescribed format, quoting the rate of electricity to be sold to Bangladesh. BPDB informed the NEA of its intention to accept the bid after evaluating the submitted documents and confirming acceptance by the relevant body.

The NEA has to give a written response to BPDB within seven days regarding the acceptance of the deal. Following that, BPDB will provide the draft of the power sale agreement to the NEA, which needs to finalize the agreement within 28 days of receiving the draft. There will be a tripartite agreement between the NEA, NTPC Vidyut Vyapar Nigam (NVVN) of India, and BPDB.

Kulman Ghising, executive director of the NEA, said that after completing all the remaining processes, work has begun to export electricity to Bangladesh from this rainy season. "Since the three bodies have agreed on the draft of the tripartite electricity sale agreement, the agreement will be reached soon. Then we will send the list of projects to the Central Electricity Authority of India for approval to export electricity to Bangladesh. Since new projects will take time for approval, the electricity produced from the projects that have already received export approval in India will be exported to Bangladesh. We will send the proposal for approval,” said Ghising.

The NEA is preparing to export electricity produced by its subsidiaries, including the 25 MW Trishuli and 22 MW Chilime hydropower projects, which were built with Indian grants, to Bangladesh. Both these projects have received approval for power export from India.

The NEA will sell 40 megawatts of electricity to Bangladesh for six months during the rainy season, i.e., from June 15 to November 15 each year for five years. The authority will receive 6.40 cents per unit by selling electricity to Bangladesh.

The authority will receive the price of electricity exported to Bangladesh through the Dhalkebar-Muzaffarpur 400 kV international transmission line between Nepal and India at the Muzaffarpur point in India. In other words, the meter of electricity exported to Bangladesh will be in Muzaffarpur. The NEA will bear the technical leakage of the transmission line from Dhalkebar to Muzaffarpur. Electricity will reach Bangladesh through the Bahrampur (India)-Bheramara (Bangladesh) 400 kV transmission line from Muzaffarpur via India's transmission line.

Kulman Ghising, the executive director of the NEA, said that Bangladesh will bear all the taxes and fees, including the transmission line fees, leakage charge, and the trading margin taken by NVVN after the Muzaffarpur point. Ghising mentioned that the per-unit rate of electricity will be around 7.6 cents when it reaches the border of Bangladesh.

"We will get 6.40 cents at the Muzaffarpur point. There is no risk of currency exchange as we will be paid in dollars. The rate we got is reasonable for the sale of electricity in the rainy season," he said. The electricity trade, which is set to begin symbolically in the first phase with Bangladesh at the government-to-government level, will help facilitate large-scale trade in the region in the coming days and open up many other avenues of electricity trade.