Sufian Asif Independent researcher and freelance columnist, Dhaka.

Today, challenges like climate change, pandemics, energy reliance, economic crisis, and many more are concerning us. No nation can overcome these obstacles without the assistance and collaboration of other nations. Most importantly, many of these problems have international repercussions. South Asia is facing much more difficulty when compared to other regions. In South Asia, we have some regional organizations, but they are ineffective.

The time has come to revive regional organizations such as Bangladesh, Bhutan, India, and Nepal (BBIN), a sub-regional organization under SAARC, which has gathered some momentum in recent years.  All four nations of this subregion are facing an energy crisis due to the Russia-Ukraine war. There cannot be a better way with sub-regional energy trade involving Nepal, India, Bangladesh, and Bhutan; which would be a win-win for all countries concerned. 

Energy trade between Bangladesh and Nepal via Indian territory

The rapid growth of electricity demand in developing nations and the emergence of digital technologies has created increased opportunities for international electricity trade. BBIN-sub-regional energy integration, by having new transmission lines54, can facilitate energy trade among these countries. Following this, India-Bangladesh-Nepal could consider trilateral trade of electricity where Nepal could export its surplus electricity to Bangladesh to meet its deficit in electricity via Indian territory.

In early 2022, Dhaka proposed power trade between Nepal and Bangladesh in a way that suits the interest of both countries. No doubt that the proposal made perfect sense. The remarks by Bangladesh come at a time when India, which lies between the two countries, has expressed its eagerness to promote sub-regional cooperation on energy with Nepal, Bangladesh, and Bhutan. The proposal indicates a good example of regional energy cooperation between Bangladesh and Nepal in partnership with India where the latter’s transmission system needs to be used.

In August 2022, Nepal and Bangladesh have jointly requested India to use its land for inter-country electricity transportation using the Indian infrastructure. Initially 50 megawatts of electricity will be transported via India. Officials and experts say if India gives access to its transmission infrastructure, bilateral power trade between Nepal and Bangladesh is compatible with the needs of both countries. However, the proposal needs further scrutiny to better understand the nature of energy cooperation between Bangladesh and Nepal and the level of partnership with India in this regard.

Prospects of energy trade between Nepal and Bangladesh

Bangladesh’s connectivity with the regional countries, especially with Nepal, Bhutan, and India is developing. Prospects of energy trade among these countries are also growing in this regard. Any energy generated by Nepal that is not consumed there can be consumed by Bangladesh or others.

The seasonal demand for electrical energy among countries in the BBIN region influences the amount of energy that can be traded. Because the electricity trade will predominantly involve the export of hydroelectric energy, the seasonal demand for electricity in Bhutan and Nepal plays a critical role in determining the feasibility of trade. In the monsoon season, there is ample energy available from hydroelectric resources in Bhutan and Nepal which can be sold to India and Bangladesh. This seasonal variation in the need for electricity in Bangladesh offers an opportunity for Bhutan and Nepal, where electricity generation peaks during the monsoon season, because of water availability.

The fact is that, in Bangladesh, the demand during the daytime in summer is high due to cooling needs. These demand patterns throughout the day suggest opportunities for Nepal to flatten the pattern of energy production throughout the day relative to the pattern of their internal demand by selling electricity to Bangladesh, particularly during the summer months when the demand in Nepal is low and the demand in Bangladesh is high. Importing this surplus electricity would boost Nepal’s economic fortunes as well as Bangladesh’s summer demand.

Bangladesh-Nepal-India trilateral relation

India is considering Nepalese and Bangladesh proposals to allow Kathmandu to sell electricity to Dhaka via Indian territory and Indian infrastructure which would deepen sub-regional cooperation in a big way. Officials say a meeting between Nepali and Indian officials led by energy secretaries of the countries will finalize the matter. The meeting is scheduled to be held in the third week of February in New Delhi.

India offers the opportunity to interconnect the Bangladesh, Bhutan, and Nepal electricity supply industries. The possibility of using Indian power infrastructure for electricity trade between Nepal and Bangladesh is another facet of India’s neighborhood engagement. These bonds of support, trade, and economic opportunities should bind the countries, with India as a critical player. Acting in unison would be in the enlightened self-interest of each country in South Asia. This approach makes India a reliable partner. The power trade between Nepal and Bangladesh also reflects active role of a silent organization BBIN. Nepal will gain from the sale, and Bangladesh will benefit from access to electricity.

Besides opening the opportunity for bilateral trade between Nepal and Bangladesh, a new opportunity for sub-regional energy trade among BBIN countries is also emerging, with India itself pushing for it. For this, transmission line connectivity alone will not be enough. There is a need for harmonized rules and regulations among the participating963.- countries and there should be a multilateral agreement on details including the wheeling charge of electricity among the participating countries. It is hoped that Nepal and Bangladesh will widen collaboration in the power sector and include partner nations to solve the energy interdependency in South Asia.