Kathmandu, March 4 (IANS): Infrastructure major GMR India is to enter into an agreement with Bangladesh to export 500 MW electricity from two hydropower projects it is constructing in Nepal, according to officials here.
GMR has already signed an agreement with the Nepal government to build the 900-MW Upper Karnali project in western Nepal and is in the final stages of acquiring permission for constructing the 600-MW Upper Marsyangdi-II project in central Nepal.
An agreement for the export of power to Bangladesh will be signed during the three-day regional energy conference starting on Thursday in Kathmandu where energy ministers and officials looking after cross-border energy cooperation in India, Nepal, Bangladesh and Bhutan will be participating, according to Nepali officials familiar with the development.
Nasrul Hamid, Bangladesh minister of state for power, energy and mineral resources, and Harvinder Manocha, GMR's country head for Nepal, will sign the relevant agreement which will be witnessed by Nepal Prime Minister Sushil Koirala.
Media reports in Kathmandu and Dhaka suggest that this is the first time that such bilateral cooperation in the Saarc region will take place -- thanks to the Saarc Energy Pact signed during the 18th Saarc Summit held last year in Kathmandu and India's recent sub-regional cooperation, namely BIBN (Bhutan, India, Bangladesh and Nepal) initiative.
The Saarc agreement has paved the way for member states to buy and sell electricity between each other's markets on their agreed prices, making electrical power a good tradeable item in the Saarc trading process.
GMR is upbeat about the agreement with Bangladesh, a power-starved country, and has offered a competitive price. Once the memorandum of understanding is signed between the two parties, a power purchase agreement will be signed between GMR and Bangladesh Power Division.
Nepali officials have welcomed the development as this will also pave the way for regional energy trading and also open avenues for other types of trading in sub-regional way.
Nepal is facilitating the agreement, according to Keshav Adhikari, spokesperson at Nepal's ministry of energy.
Of late, with GMR's growing interest in Nepal's high potential hydropower sector, the International Finance Cooperation (IFC), an arm of the World Bank is also lending financial and technical support to GMR.
Initially, Bangladesh will import 200 MW from the Upper Marsyangdi-II project and the remaining 300 MW will be imported from Upper Karnali. Bangladesh has been making several proposals with Nepal for purchase of electricity but due to the absence of a dedicated regional pact, it had not materialized till now.
India's nod is also quite important as transmission lines would need to cross over to Bangladesh through India, and Bangladeshi officials are in talks with Indian authorities in this regard, media reports said.