Bangladesh now plans import of hydro-electricity from Nepal after India to meet its increasing demand for power.
Also, it eyes making joint investments in hydro-power projects with the Himalayan country.
Official sources said a deal on the import of 500 megawatt (MW) of hydro-electricity will be signed between the two countries during Kathmandu visit of Nasrul Hamid, Bangladesh’s State Minister for Power, Energy and Mineral Resources, on March 3-5.
However, GMR, an Indian company, will be a part to such an import deal as the company generates the hydro-power in Nepal.
“We are going to sign a Memorandum of Understanding (MoU) with Nepal on hydro-electricity import, joint investment in hydro-electricity projects and knowledge sharing,” Energy Adviser Dr Tawfiq-e-Elahi Chowdhury told the Daily Observer on Saturday.
Power Division has made massive preparations to ensure the country’s energy security from India, Nepal and Bhutan. Bangladesh also sought open access to Nepal’s hydro-electricity potential, which is estimated to be around 46,000 MW.
According to a Power Division official, Nepal government recently identified the proposed Upper Marsyangdi-II as one of its national priority projects, which is being facilitated by the Investment Board of Nepal where GMR will invest and give 12 percent royalty to Nepal and bring all power from Nepal to India. Later, GMR will market this electricity in its own way.
“International Finance Corporation (IFC), an arm of World Bank, will provide fund and technical support to Bangladesh for making investment in the Nepalese hydro-power project,” the official further said.
IFC has partnered with India’s GMR Group to develop 900 MW of power from the Upper Karnali and 600 MW from Upper Marsyangdi hydropower projects in Nepal. IFC InfraVentures, a global infrastructure project development fund, is a co-developer of these projects.
“We (the government) or the private sector could set up the hydro-power plant, the installation cost of which is high. But if one calculates the cost of per unit electricity, then it is less than Tk 1 (one),” said Nasrul Hamid.
On his upcoming visit to Nepal, the State Minister said that power connectivity between the two South Asian countries would be the main focus in the formal Dhaka-Kathmandu meeting. “A PowerPoint presentation will be made and we shall submit our open proposal to Nepal’s energy minister about the electricity issue,” he added.
According to Bangladesh’s energy adviser, the government has initiated measures to ensure the country’s energy security by meeting its growing demand for electricity since 2012. “However, we know that right now, we shall not see any visible result, but we need to start the bilateral talks as the three countries are now ready to move forward to improve the livelihoods of the people in this region,” Tawfiq-e-Elahi Chowdhury said.
A Power Division official said, “Our plan is to sign a MoU on the exchange of power between the two countries through GMR. At the same time, we need to explore the modes of exchange, investment and infrastructure for this purpose.”
The Power Division launched formal talks with Nepal on August 6, 2014.
During a three-day visit of Nepal’s Energy Minister Radha Kumari Gyawali to Dhaka in August last, Bangladesh sought open access to Nepal’s huge hydro-electricity potential.
To continue negotiations with Kathmandu successfully, the Power Division formed a 12-member committee that also took opinion of the Indian government as it is a tripartite show.
“Though it will take another decade to implement the mega hydro-power project in Nepal, Bangladesh has listed its name as a ‘club member’ for such an initiative, given the country’s limited primary fuel resources. This has finally opened a window for obtaining low-cost electricity,” the state minister said.
“We wish to invest in Nepal’s hydro power, both in the private and public sectors. Then we can establish an open market for energy purchases,” the Power Division official said.
“We have to organise a tripartite meeting between Bangladesh, India and Nepal as we need to establish a power transmission corridor from India,” the official explained.
IFC will make investments for project development and help achieve financial closure for these projects, which have a total investment outlay of $1.7 billion. According to the joint development agreement, 12 per cent of the power generated from the Upper Karnali project will be provided free of cost to Nepal and Bangladesh could buy around 500 MW from GMR.
Bangladesh now imports electricity from India through its western border to a 500 MW sub-station at Bheramara in Kushtia.