BD, GMR to sign power purchase deal from Nepal via India

The country is set to sign a power deal with India's infrastructure giant GMR Group to purchase 500 MW of electricity per day at a rate of 7.71 cents per unit for a period of 25 years.
"We are set to sign the deal by this month after a huge negotiation meeting between the technical people of the two committees. The contract would be signed between Bangladesh Power Development Board (BPDB), GMR Group and India's NVVN (NTPC Vidyut Vyapar Nigam Ltd. (NVVN) was formed by NTPC Ltd in the year 2002, as its wholly owned subsidiary to tap the potential of power trading in India) to import electricity from the Nepal's Upper Karnali scheme via India," State Minister for Power, Energy and Mineral Resources Nasrul Hamid told the Daily Observer.
According to the proposal Bangladesh will pay Tk 381.60 billion over 25 years to procure 500 megawatts of electricity.
The Power Division has formed a Joint Steering Committee (JSC) and Joint Working Committee (JWC)
to extend cooperation in the energy sector between Bangladesh and India.
In December 2019, the Cabinet Committee on Public Purchase of Bangladesh gave the nod to import power at a rate of 7.71 cents per unit for a period of 25 years.
Bangladesh is now importing 1,160 MW of electricity from India, the tariff of which is around 2 cents less than GMR price but less than the tariff of rental and quick rental power projects.
GMR will construct around a 1000 MW capacity power plant at Nepal's Upper Karnali scheme in Western Nepal. From this project Nepal will receive 108 MW out of the remaining 400 MW for free while GMR plans to sell the rest to the government of the Indian State of Haryana.
Bangladesh signed a memorandum of understanding (MoU) with India's NVVN to import electricity from the Upper Karnali scheme via India during Bangladeshi Prime Minister Sheikh Hasina's visit to India in April 2017.
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 a witness.
"A principal agreement on the commercial terms of the power purchase agreement excluding tariff rates was reached between the Bangladesh Power Development Board and GMR last year and negotiations had been struck over the rates since then. However, we finally agreed to examine all other issues," a senior official of the Power Division said, preferring anonymity.
This project has a high price tag due to surcharges placed on the use of Nepali and Indian transmission grids. As the developer is required to relay energy using Nepali and Indian infrastructure, it will have to pay wheeling charges to both Nepal and India. Apart from the charges, the loss of electricity in long-distance transmission is also usually high, he added.
GMR Energy and the government signed a memorandum of understanding on building the plant in 2008.
Earlier, Bangladesh has shown keen interest to invest in Nepal's hydropower sector. To import cheap electricity from Nepal,
Bangladesh is ready to invest US$ 1 billion in Nepal to pursue every possible collaboration in the power sector.
Bangladesh has projected its electricity demand to reach 20,000 MW in 2021 and 34,000 MW in 2030, according to the Power Division and planned to import 6,000 MW from the neighboring countries.