In a first, India, Nepal and Bangladesh are working on a tripartite power trade deal under which Nepal will supply up to 500 megawatts (MW) of hydropower to Bangladesh using India’s transmission line, a move that can further boost cross-border electricity trading in South Asia.

Besides, there are also plans to lay a dedicated transmission line connecting Nepal and Bangladesh via India, which is at official level talks at present. Two routes have been identified for the same.

Government officials said that bilateral trade in power is already happening in South Asia, but such a tripartite deal will open up more avenues for electricity trade in the region, particularly for green energy, going ahead. Besides, it will also open ways to sell power to neighbouring countries such as Sri Lanka and Myanmar.

A top Indian government official said, “India is open to permit transit of electricity from Nepal or Bhutan to countries such as Bangladesh or even Sri Lanka, if they have grid interconnection capacity available and they are able to harmonise grid operations with India.”

Deal details

As per the proposed three-way deal, Nepal will supply hydropower to Bangladesh leveraging India’s high-voltage transmission line. At first, 50 MW will be provided to Bangladesh by Nepal using India’s Baharampur-Bheramara cross-border transmission line. The electricity will be supplied from Nepal’s 900 MW Upper Karnali hydropower project.

In return, India wants Bangladesh to provide it access to lay transmission lines for connecting its north eastern States.

“In the first attempt, Bangladesh has proposed to procure on a long term basis 500 (MW) from one hydro power project in Nepal and India has given its go-ahead. It is the beginning of the trilateral power transaction through the Indian grid, the official mentioned above said. 

Trade sources said that there is huge potential for India, which already runs the world’s largest single grid infrastructure. Considering Nepal’s hydropower potential and rising demand, especially for renewables in South Asia, India could be in that sweet spot where it can leverage its grid for supplying electricity in the region.

Dedicated transmission line

“India will support more of such cooperation, subject to two conditions. First, if the export or import of power is from or to India, then it should not affect India’s energy supply or energy security. We have to see the seasonality. Second, such power plants should not have been built with any investment or contribution from a third country, which is not in tune with India’s strategic interests,” the official added.

Officials said that for a dedicated transmission line, Nepal and Bangladesh have identified two corridors. The first is the Anarmari (Nepal)-Panchagarh (Bangladesh) corridor with a total length of 49 km, of which 24 km will be in India.

The second is the Anarmari (Nepal)-Thakurgaon (Bangladesh) line with a length of 83 km, of which 33 km will be in the Indian territory.

Bangladesh is already importing 500 MW power from India through the Baharampur-Bheramara transmission line, and around 150-160 MW through the Tripura-Comilla grid interconnection project. Besides, it is now also getting coal-fired power from Adani’s Godda (Jharkhand) thermal power plant .