Nepal Begins Electricity Export to Bangladesh

Nepal has initiated an important step in regional energy cooperation. On November 15, 2024, Nepal commenced exporting electricity to Bangladesh using India’s electricity grid. This collaboration involves three nations – Nepal, Bangladesh, and India. The inauguration was attended by key officials from each country, denoting a new era in energy alliances.

Background of the Agreement

The tripartite power sales agreement was signed on October 3, 2024, in Kathmandu. This agreement involves the Nepal Electricity Authority, Bangladesh Power Development Board, and NTPC Vidyut Vyapar Nigam. The deal allows for an initial export of 40 MW of electricity from Nepal to Bangladesh. This move is crucial given Bangladesh’s ongoing electricity crisis.

Reasons for Electricity Export

Bangladesh is currently facing severe electricity shortages. The crisis has been exacerbated by the suspension of power supply from Adani’s Godda plant. Additionally, maintenance issues at Bangladesh’s Payra thermal unit have further limited electricity production. The introduction of Nepalese electricity is expected to alleviate some of these challenges.

Significance of the Initiative

This initiative is seen as a milestone in sub-regional connectivity and energy cooperation. Nepal has substantial untapped hydroelectric potential. By exporting electricity, Nepal can enhance its energy alliance with Bangladesh and India. This collaboration is expected to promote industrial growth and regional prosperity.

Political Context in Bangladesh

The energy crisis in Bangladesh is occurring amid political instability. Recently, a petition was filed in the High Court in Dhaka to review the agreement with Adani Group. Critics argue that this agreement could lead to higher electricity prices for consumers. The timing of Nepal’s electricity export is critical as it offers a potential solution to these challenges.

Future Prospects

The success of this electricity export could lead to further cooperation in energy resources among the three nations. Nepal’s Minister of Energy has expressed optimism about the long-term benefits of this green energy initiative. It may pave the way for more extensive energy trade in the region.

Geographical Advantage

Bangladesh’s proximity to Nepal, just 40 miles away, facilitates the transport of hydroelectricity. This geographical advantage can help Bangladesh secure cheaper electricity, enhancing its energy security.

Challenges Ahead

Despite the positive outlook, challenges remain. Political issues in Bangladesh could affect the stability of energy agreements. Additionally, infrastructure improvements may be necessary to support increased electricity flow.

Conclusion on Energy Alliances

The electricity export from Nepal to Bangladesh is a critical step in enhancing regional energy cooperation. It reflects the potential for collaborative solutions to energy crises in South Asia.

Questions for UPSC:

1. Examine the impact of regional energy cooperation on economic development in South Asia.
2. Discuss in the light of Nepal’s hydroelectric potential and Bangladesh’s energy crisis, the significance of the tripartite power sales agreement.
3. Critically discuss the implications of political instability in Bangladesh on its energy agreements.
4. Analyse the role of geographical proximity in enhancing energy trade between neighbouring countries, taking the example of Nepal and Bangladesh.

Answer Hints:

1. Examine the impact of regional energy cooperation on economic development in South Asia.

1. Regional energy cooperation can lead to lower energy costs, enhancing industrial competitiveness.
2. Increased energy access can spur economic activities and improve living standards in member countries.
3. Collaboration encourages infrastructure development and investment in renewable energy projects.
4. Energy alliances can promote political stability and peace through mutual dependencies.
5. Shared energy resources can help mitigate energy crises, leading to sustainable economic growth.

2. Discuss in the light of Nepal’s hydroelectric potential and Bangladesh’s energy crisis, the significance of the tripartite power sales agreement.

1. Nepal has vast untapped hydroelectric resources, providing a sustainable energy source for exports.
2. Bangladesh faces acute electricity shortages, making the agreement crucial for energy security.
3. The tripartite agreement facilitates efficient cross-border electricity trade, optimizing resource utilization.
4. This cooperation can stimulate economic growth in both countries by ensuring reliable energy supply.
5. The agreement signifies a strategic partnership that can lead to further regional energy collaborations.

3. Critically discuss the implications of political instability in Bangladesh on its energy agreements.

1. Political instability can undermine confidence in long-term energy agreements, affecting investments.
2. Changes in government can lead to policy shifts, potentially jeopardizing existing contracts.
3. Public dissent against energy prices may arise, impacting the sustainability of agreements with foreign entities.
4. Political issues can disrupt infrastructure projects necessary for energy trade and cooperation.
5. Instability may prompt countries like Nepal to reconsider their energy export commitments to Bangladesh.

4. Analyse the role of geographical proximity in enhancing energy trade between neighbouring countries, taking the example of Nepal and Bangladesh.

1. Geographical proximity reduces transportation costs and time for electricity transmission.
2. Being only 40 miles apart allows for efficient grid connections and energy sharing.
3. Proximity facilitates quicker response to energy demands during crises, ensuring reliability.
4. Close geographical ties can encourage stronger political and economic relationships, enhancing trade agreements.
5. It enables countries to leverage each other’s strengths, such as Nepal’s hydroelectric potential and Bangladesh’s consumption needs.