The governments of the three BBIN countries are currently engaged in negotiations to lay a dedicated transmission line connecting Nepal and Bangladesh via India’s territory, and have already identified two potential power transmission corridors.
The first is the Anarmari (Nepal)-Panchagarh (Bangladesh) with a total length of 49 kilometre (km), of which 24 km will be in India. The second is the Anarmari-Thakurgaon (Bangladesh) line with a length of 83 km, of which 33 km will be in Indian territory.
The energy experts say the major objectives of the trilateral power deal include expansion of CBET, facilitation of power exchanges to meet the electricity demands of each country, building a framework for long-term regional power cooperation, and harnessing the potential of renewable energy (RE) sources for a greater and more sustainable energy sector.
The proposed agreement will be a game changer for Nepal’s energy market. Efforts towards greater sub-regional power trade and cooperation will undoubtedly stimulate Nepal’s economy. The agreement will enhance the confidence of both domestic and foreign power operators to invest in Nepal’s burgeoning energy sector.
Moreover, regular power exports from Nepal to neighbouring countries will have considerable impact on Nepal’s gross domestic product (GDP). The revenue generated from exporting electricity will contribute to Nepal’s economic growth and development. Lauding the landmark trilateral power pact, Sunil KC, founder of Nepal-based think-tank the Asian Institute of Diplomacy and International Affairs, said as trust and confidence build through this collaboration, it will pave the way for deeper cooperation in other sectors as well.
Upper Karnali Hydropower Project in Nepal
Such a comprehensive approach to regional integration will foster economic growth, strengthens diplomatic ties, and promote stability in the BBIN sub-region. Top Nepal government officials too called the tripartite power arrangement as “very symbolic and important” as it will the country’s first electricity export beyond India.
The development also assumes significance for Bangladesh which has been confronting blackouts, amid a foreign exchange shortage that has tightened the country’s fuel imports. Nepal generates about 30% more hydroelectricity than it requires during the wet season, and has long been sought to export some of the surplus power to Bangladesh. The proposed 500 MW export deal will provide much needed supplement to Bangladesh’s present power generation capacity of over 29,000 MW—of which more than 40% is not operational.
According to reports, Bangladesh’s power utilities have recently been experiencing around 2000 MW worth of daily load shedding, or planned blackouts, under a rationing system due to fuel crunch. Dhaka’s analysts say ensuring a steady supply of RE like hydroelectricity is a major policy initiative that will “insulate the power supply from external fuel shock” from which Bangladesh has been suffering because of disruption in global supply chains caused by the Russia-Ukraine conflict. Under the tripartite agreement, Bangladesh will directly pay the transmission charge and service fees for importing power from Nepal through India’s transmission links to the NVVN, which is the nodal agency of India for CBET with the neighbouring countries.
India also wants Bangladesh to provide access to construct transmission lines through territory for connecting the North Eastern states with the country’s Eastern Grid. Hydropower specialists maintain that the Bangladesh, Nepal and India trilateral power agreement will open up more avenues for the CBET in the BBIN sub-region, particularly for green energy.
There is a huge trade potential for India, which already has world’s largest single grid infrastructure. The tripartite power trade and cooperation agreement will also open ways to export power to other neighbouring countries like Sri Lanka and even Myanmar if they have requisite grid interconnection capacity and they are able to harmonise grid operation with India.
Bangladesh also intends to develop hydropower projects in Nepal, including the Sunkoshi-II Project. At the fifth meeting of the secretary-level Joint Steering Committee on power cooperation between Bangladesh and Nepal held on May 16, 2023, in Patuakhali (Bangladesh), the two sides among others discussed in detail the implementation of the proposed 683 MW Sunkoshi-II Hydropower Project under joint venture arrangement. Reports say both feasibility study and environment impact assessment (EIA) of the project have been completed and, the two sides agreed that the NEA and BPDB would sign the joint venture agreement within the next six months to develop this project.
In order to meet its industries’ growing electricity needs, Bangladesh is also reportedly in the process of signing a memorandum of understanding (MoU) with Bhutan. Dhaka and Thimphu have discussed the prospects of a sub-regional growth triangle through the BBIN initiative. Bangladesh has evinced its interest in joint development of hydropower projects with Bhutan.
Reports indicate that Bangladesh is willing to invest $ 1 billion in Bhutan’s Dorjilung Hydropower Project. The 1,125 MW project in Lhuentse district of Bhutan, will be implemented through a trilateral power cooperation agreement between Bhutan, Bangladesh and India. The surplus power will be exported to Bangladesh via India once it becomes functional.
Bangladesh in its attempts to address the challenge of enhancing the share of RE in the country’s power mix is keen on investing in the hydropower projects of Nepal and Bhutan to achieve its RE target, and has been pushing India to facilitate the same through its power transmission networks and territory. India can earn much needed foreign currency by providing its transmission links.
Such initiatives will attract more investments into the region in the green energy sector and Indian firms will be the likely gainers in this regard. Both the Himalayan nations of Nepal and Bhutan are blessed with enormous hydropower potentials. Hence efforts should be made towards tapping the same through multilateral cooperation. The BBIN countries can benefit from clean form of energy by developing regional grid connectivity.