The Independent Power Producers’ Association-Nepal urged the government to take measures to ease power trade between Nepal and Bangladesh via India which they say will resolve market access issues currently being faced by private hydroelectricity producers.

Fresh from talks with energy authorities in Dhaka, Bangladesh, association officials requested the government to come up with a clear plan on exporting electricity to Bangladesh using Indian transmission lines.

“There is high demand for electricity in Bangladesh while Nepali independent power producers are struggling to find new markets for lack of government initiatives to build regulations to facilitate planned energy trade through tripartite agreements with Bangladesh and India,” said Kumar Pandey, vice-president of the association. “The government should announce a concrete plan with export quantity and timelines, and also make the necessary amendments paving the way for private producers to capitalise on this highly favourable opportunity.”

According to Pandey who also attended the meeting in Dhaka, Bangladeshi authorities have planned to import 9,000 MW from Nepal over the next 10 years. The independent power producers have also asked the government to clarify whether it will export energy under a government-to-government (G2G) model or also facilitate tripartite energy trade allowing independent power producers to play a part in the process.

The move by independent power producers follows the relaxation of energy trading provisions by India in March allowing private entities in Nepal to develop, operate and maintain a dedicated transmission system from Nepal to the pooling station in India for power trade with India or Bangladesh.

“In line with the Indian government’s policy on allowing export of electricity produced in Nepal through the existing transmission lines or by developing a new dedicated system, the private hydroelectricity sector is ready to invest in building such infrastructure if there is a government-level understanding,” the association said.

Earlier, India had allowed only state-owned hydropower projects or companies with a minimum 51 percent Indian stake to trade power with India or other countries using its transmission lines.

The independent power producers have also asked the government to table the power trade proposals of private hydropower companies at the next meeting of the Joint Working Group of Bangladesh and Nepal, and initiate discussions with Indian authorities on the use of power lines in India.

According to officials, independent hydropower projects are hamstrung as they have not been able to sign power purchase agreements with the electricity authority in the absence of a fully functioning electricity regulatory commission to fix the purchase rates.

“Access to the Bangladeshi market will resolve the issues as private producers are eager to capitalise on this opportunity, and the authorities there are also eager to import electricity from Nepal as soon as possible,” said an official present at the discussions.

According to the Nepal Electricity Authority, as many as 80 independent power projects are currently producing 552 MW while another 39 private projects with a combined installed capacity of 525 MW are expected begin commercial operations in the next fiscal year.  

Last August, Nepal and Bangladesh signed a cooperation agreement in the energy sector paving the way for the export of surplus electricity that Nepal is expected to produce within a few years.

Bangladesh has also repeatedly shown interest in importing power from Nepal via India, and has raised the issue at the meetings of the sub-regional BBIN (Bhutan, Bangladesh, India and Nepal) Initiative which was signed by the four countries to facilitate regional trade and business.

Bangladesh has already signed a memorandum of understanding with India’s NTPC Vidyut Vyapar Nigam to import electricity generated by the Upper Karnali Hydropower Project being developed in Nepal with Indian investment. As per the understanding, it will import 300-500 MW of energy from the project.

A 14-member delegation of the Independent Power Producers’ Association-Nepal led by its President Shailendra Guragain recently concluded a three-day visit to Bangladesh where they held talks with the Bangladeshi state minister for energy, chairman of the power development board, president of the regulatory authority, infrastructure development company, private power producers and consultants.