GMR Upper Karnali Hydropower, the developer of the 900 MW Upper Karnali Hydroelectric Project, is preparing to sign a power purchase agreement (PPA) with the Bangladeshi government to evacuate energy produced by the scheme to Bangladesh via India, GMR officials said.

A team from the Bangladeshi government is scheduled to visit the project site in western Nepal and start PPA negotiations with the developer. 

“The team from Bangladesh will visit Nepal soon to expedite negotiations,” said Harvinder Manocha, chief operating officer of GMR Energy. “We are planning to export 300 to 500 MW of energy generated by the hydropower project in Nepal via India.”   

Bangladesh signed a memorandum of understanding (MoU) with India’s NTPC Vidyut Vyapar Nigam (NVVN) to import electricity from Upper Karnali via India during Bangladeshi Prime Minister Sheikh Hasina’s visit to India in April 2017. 

According to GMR, as Indian laws don’t allow private developers to export electricity produced in third countries over Indian transmission lines, Bangladesh signed an MoU with the state-owned cross-border electricity trading agency while GMR was the witness. 

“It is clearly written in the MoU that the energy that NVVN will supply to Bangladesh will come from Upper Karnali,” said the GMR source. “The tariff rate will be mutually finalized by GMR and Bangladesh after negotiations.”   

Bangladesh has repeatedly shown interest in importing electricity from Nepal via India, and has raised the issue at 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. 

Bangladeshis have also shown interest in investing in Nepal’s hydropower sector under the same framework agreement. 

Bangladesh first expressed interest in putting money in hydropower during the ninth South Asia Economic Summit it hosted in Dhaka last October. On the sidelines of the event, the then commerce minister Romi Gauchan Thakali and his Bangladeshi counterpart Tofail Ahmed signed an agreement to build two hydroelectric plants capable of generating over 1,600 MW of electricity in Nepal.

The proposed projects are the 1,110 MW Sunkoshi II and 536 MW Sunkoshi III on the Sunkoshi River in central Nepal. Both countries have agreed to develop the projects under the BBIN Initiative.

As per the agreement, the electricity produced by the Sunkoshi projects will be evacuated to Bangladesh via India through the BBIN economic corridor. However, no headway was made on this front as the Commerce Ministry failed to communicate with the Energy Ministry on the issue.

Later, when the then energy minister Janardan Sharma visited Bangladesh, he held talks with Bangladeshi State Minister of Power Nasrul Hamid on making joint investments for the development of hydroelectricity. He also invited Hamid to Nepal to sign an MoU to this end.