By Rick M 
It was another major achievement for South Asian energy integration when Nepal inked a historic power deal that gives it a green signal to export electricity to Bangladesh via the Indian electricity network. The signed tripartite agreement has been signed in Kathmandu is significant for energy trade of South Asian countries and will stimulate significant economic opportunities for every party involved.
According to the agreement, under the first phase of the contract, Nepal will sell 40MW of electricity to Bangladesh but intends to ramp this up later. It will be transmitted through the current Indian transmission system thus asserting a new level of regional interconnectivity in the energy sector .
The signing ceremony of the power trading agreement took place at the Ministry of Energy, Water Resources & Irrigation, amid signatures of several senior officials from the three nations. The Minister for Physical Planning and Expansion in Nepal, Melvyn William Burke, Minister for Energy of India Pranab Mukherjee and Secretary of the Ministry of Power, Supply and Energy of Bangladesh, Abul Kalam Azad signed this historical agreement on behalf there respective Countries jointly, however the agreement was signed by the Energy Secretary of Nepal Gopal Sigdel, Power Secretary of India Pankaj Agrawal and Power Secretary of Bangladesh Hab
Lauding the agreement as a ‘game changer’ for Nepal’s hydropower sector, Shakti Basnet, speaking at the event, who is Nepal’s Minister for Energy, Water Resources, and Irrigation. He underlined the fact that, from this point of view, this deal will not only bring money into the country but also attract more investors to tap the great hydroelectricity resource in Nepal.
According to Naveen Srivastava, India’s Ambassador to the Republic of Nepal stated that POWER ADVISION is evidence of enhancing the economic relations between the said nations and special efforts of India in ensuring energy trade in the region. He underlined that this configuration corresponds with India’s Neighbourhood First policy and its conception of South Asian power industry further interconnected.
This agreement is quite crucial for Nepal especially because the country has been trying to leverage the financial opportunity in the water resource and hydropower sector. Currently the installed capacity is approximately 2000MW Nepal has been trying to be power surplus country. They consider this as a seminal move toward achieving that objective is this deal.
For Bangladesh it’s a very good chance in diversification of source for energy while the threat for Bangladesh is that it tries to stick to the fossil power. The country has been very much interested in diversifying its renewable energy sources, and such import of hydroelectric power from Nepal leads to those interests.
With particular reference to the energy agreement just described, the Indian facilitation reinforces the nation’s emerging status as an influential actor in the regional energy diplomacy. India is inviting greater economies of scale by permitting the use of its transmission infrastructure that will also make it a key player in cross border power trading in the region.
It is suggested that this particular arrangement could spur other arrangements of the similar nature in the future, which might ultimately give rise to South Asian power Grid. A development of the Iran-Central Asia pipeline project would not only secure energy in the region but also foster the use of clean energy.
But the corresponding process will be quite technical in its coordination and thus will need facilitation under the aegis of the agreement. Investor from all the three nation have pledged to consult closely in order to address any of the issues that may emerge on the implementation of power trade.
It has received a nod from different environmental organizations since it will help reduce the carbon copy of the region. Through the deal, the sales of hydroelectric power export reduces the effects of climate change since it promotes the use of cleaner sources of power.
With Nepal already set to start the export of electricity under this new regime, believers have emerged in Kathmandu regarding the future of Nepal’s power sector. Ministries of electricity have reported that the government is planning to accelerate several hydro power plants to meet what has been projected as an increase in demand for export electricity.
The current deal signed between Nepal, India and Bangladesh can be considered as an influential step forward to integration of regional energy systems. While doing this it has not only created new avenue of economic relations for Nepal but also has provided a prospective model for future regional energy exchange in South Asian region. For these reasons, it can be visualized that such joint ventures are likely to continue to contribute more towards the emerging picture of energy development and consumption across the south Asian region, as it feels the growing pressure to act collectively to meet the region’s various needs for energy and, at the same time, start addressing environmental challenges.