January 24:   Nepal will have access to Bangladeshi market for the export of electricity.

This new avenue is opened up for power trade with a third country with the signing of the agreement by Bangladesh with India for importing electricity from Nepal via Indian territory.

There has been so far only one agreement for exporting power to only one country when the Power Trade Agreement (PTA) was signed between Nepal and India (that too under suspicion regarding its implementation).

No process of power trade from Nepal has been forwarded with another neighbor China.  In such a situation, the access to Bangladesh for power trade has increased the possibility of power sector development in Nepal. 

           Khadga Bahadur Bista, former President of Independent Power Producers’ Association, Nepal (IPPAN) considers the Bangladeshi plan as a major strategic decision.  He says for the time being, Bangladesh will have to pay less for per unit of power while purchasing from India than Nepal, but it seems that it has forwarded the present purchase policy of importing from Nepal in view of climate change, future dearth of non-renewable energy and   emphasis on renewable energy.

          Bangladesh, while emphasizing on its own production, has been successful in generating 10,000 mw in seven years.  And, this trend is getting continuation.  Besides this, Bangladesh has forwarded power purchase strategy to buy electricity to fulfill its high demand for power from India, Bhutan and Nepal as well. 

Therefore, if possible, it wants to import power directly from Nepal and if not, invest in the hydro power projects in the concerned country and then import it. Bangladesh had been making efforts for long to import power from Nepal. The process was forwarded after talks were held in minister level when Energy Minister Janardan Sharma had visited Bangladesh recently to participate in a programme.

Now, when the two countries sign understanding on this, it will open up avenues for power trade to other country for Nepal other than India.  But experts in this sector suspect that India which has defined electricity as a strategic commodity than a commercial commodity in its Cross-Border Power Trade Directory, could fail to show normal behavior on exchange of power between two countries through its territory other than buying or selling itself.

Emphasis on internal consumption

 For a long time in the past, exporting power generated in Nepal to India was deemed attractive.

 On this issue, every energy minister kept on calling for foreign investment in the energy sector. But the new Energy Minister Sharma said first, fulfill the internal demand, and then emphasize on industrialization and other development for consumption, and if saved, then only export power.  This has challenged the notion that if India does not buy electricity, developing hydro power projects in Nepal will eventually stop.

If it goes as the minister says, there is no possibility of electricity export from Nepal for a long time. On the other hand, China is also showing concern on extension of Trans-Himalayan transmission line via Kerung at Rasuwagadhi border point of Nepal.  In this situation, Nepal has to adopt a far-sighted strategy regarding power development and trade.