In a setback to the anticipated power trade between Nepal and Bangladesh, negotiations have hit a roadblock as Bangladesh pushes for a reduction in the prices quoted by the Nepal Electricity Authority (NEA).
The Kathmandu Post, citing sources from NEA officials and Nepal’s energy ministry, reported that Bangladesh is aiming to lower the quoted price through negotiations, leading to a temporary halt in the inaugural power trade between the two neighboring countries until a tariff agreement is reached.
An NEA official revealed, “After Nepal maintained that the quoted price was reasonable, the Bangladeshi side expressed the desire to engage in discussions with higher authorities.”
A recent delegation led by NEA’s executive director, Kul Man Ghising, visited Bangladesh in an attempt to resolve the disagreement. The exact tariff proposed by Nepal has not been disclosed, but NEA sources suggest it’s around 7 cents per unit.
“I heard that the Bangladeshi side aimed to negotiate the rate down to 5 cents per unit,” said an energy ministry official anonymously to The Kathmandu Post.
Previously, NEA’s Deputy Managing Director, Pradeep Kumar Thike, drew a comparison between Nepal’s proposed price and an Indian company’s payment for a medium-term power purchase agreement last year.
Despite the rate dispute leading to the delegation’s return to Nepal, NEA officials remain optimistic about reaching a consensus in future talks. Managing Director Pradeep Kumar stated, “They are ready to buy, and we are ready to sell. The talks have been positive, and we are hopeful for a final agreement in the upcoming meeting.”
The joint statement issued on February 22 emphasized both parties’ intent to expedite a power sale agreement, facilitating Nepal’s electricity export during the upcoming rainy season. NEA’s proposal aims to export 40MW of power from June 15 to November 15, with the agreement set for a five-year duration, utilizing cross-border transmission lines.
India has also agreed in principle to support the export of 40MW power from Nepal to Bangladesh. The three nations anticipate signing a tripartite deal upon reaching a tariff agreement, marking Nepal’s first-ever power export to Bangladesh. The tripartite agreement was initially planned during the energy secretary-level joint steering committee meeting in May last year, involving NEA, Bangladesh Power Development Board, and NVVN.