Daccanomics
During the scorching days of June, Dhaka dwellers witnessed the relentless grip of temperatures soaring up to 38°C. The stifling heat pushed the city’s 23 million residents to their limits. On top of that, fans and air-conditioners were of no use due to frequent load shedding as power cuts marred 114 out of the initial 150 days of this year.
Even though the climate crisis looms and the unbearable heat remains a big challenge, the people of Bangladesh can take a sigh of relief because of a trade agreement that could solve the power crisis for now.
While Bangladesh is gripping with its low production of electricity, Nepal on the other hand is producing more electricity than needed. The imbalance may soon start to be corrected.
Bangladesh has signed a tripartite power trade agreement that would allow Bangladesh to import electricity from Nepal through India’s grid. This agreement would reshape sub-regional cooperation and enhance cross-border energy initiatives.
During a visit by Nepal’s Prime Minister Pushpa Kamal Dahal to India, plans were unveiled for India to facilitate the export of hydropower from Nepal to Bangladesh. Initially, Bangladesh will import 40-50 MW of electricity from Nepal, marking Nepal’s first power export venture beyond India.
This agreement will meet the long-standing demand from Nepal and Bangladesh to enable power trading through the Indian grid. This move is part of India’s efforts to enhance energy connectivity with neighboring countries like Bangladesh, Bhutan, Nepal, and Sri Lanka through electricity transmission networks and pipelines.
Previously, electricity trade with neighboring countries occurred under bilateral agreements. New guidelines for Cross-Border Trade of Electricity were developed to enable these new arrangements, allowing neighboring countries to buy and sell power through the Indian grid and participate in Indian power exchanges. The guidelines were designed to exclude power from Chinese-funded plants in neighboring countries from being traded through the Indian grid.
India and Nepal have also signed a long-term Power Trade Agreement, setting a target of importing 10,000 MW of electricity from Nepal in the coming years.
