Nepal’s hopes of promptly signing a power sale deal with Bangladesh have been dashed with the Bangladeshi side seeking negotiations to reduce the prices quoted by the Nepal Electricity Authority.

Once the two sides agree on tariffs, it will pave the way for the first-ever trading of power between the two countries.

Officials at the Electricity Authority (NEA) and the energy ministry said that the Bangladeshi side wanted to cut the price quoted by the Nepali utility through negotiations.

“After Nepal stood its ground that the price it quoted was reasonable, they first wanted to discuss the matter with higher authorities,” said an NEA official.

A team led by NEA executive director Kul Man Ghising was in Bangladesh last week. The authority is yet to formally disclose the tariff that Nepal had proposed. However, according to a source at the NEA, it is close to 7 cents [around NRs 9.30] per unit.

“I am not part of the delegation, but I heard that the Bangladeshi side wanted to negotiate the rate as low as 5 cents per unit,” said an official of the energy ministry on condition of anonymity.

Earlier, NEA Deputy Managing Director Pradeep Kumar Thike, who also looks into power trade, told the Post that the price quoted by Nepal was in the range of what an Indian company was charged for a medium-term power purchase agreement.

In May last year, the NEA and the NTPC Vidyut Vyapar Nigam (NVVN) Limited-India signed a five-year power purchase agreement.

Based on the agreement, the NEA would get a net tariff of IRs5.25 (Rs8.40) per unit from India after trade margin, transmission losses and wheeling charges. The NEA would not bear the cost of transmission and trade margin (service charge) for the supply of power to India, according to the NEA.

After the Bangladeshi side sought approval from their higher authority following the disagreement over the rate, the Nepali delegation returned home late last week.

However, NEA officials are optimistic that the two sides will agree on the tariff when they sit down for the next meeting. “They are ready to buy and we are ready to sell,” said Thike. “The talks have also been positive and we are optimistic that we will arrive at a final agreement at the next meeting.”

According to him, another meeting is yet to be scheduled.

According to a statement issued on February 22, the two sides agreed to conclude a power sale agreement as early as possible to export Nepal’s electricity from the upcoming rainy season.

The NEA had sent a proposal to export 40MW power from June 15 to November 15. According to the NEA, the power sale agreement will be valid for five years. The power will be transmitted through the Nepal-India Dhalkebar-Muzaffarpur Cross Border Transmission Line and the India-Bangladesh Barampur-Bheramara Cross Border Transmission Line.

India has also already agreed in principle to facilitate the export of 40MW power from Nepal to Bangladesh.

When Prime Minister Pushpa Kamal Dahal visited India in May-June last year, the southern neighbour had promised to help with the export of this quantum of power to Bangladesh through its existing transmission infrastructure.

With Indian territory falling between Nepal and Bangladesh, both sides must take India on board in the energy trade.

Once the two sides agree on a tariff to be charged, Nepal, Bangladesh and India are expected to sign a tripartite deal under which Nepal will export power to Bangladesh for the first time.

Nepal and Bangladesh in May last year had agreed to sign a tripartite agreement between the NEA, the Bangladesh Power Development Board and the NVVN during the meeting of the energy secretary-level joint steering committee.