India, Nepal, and Bangladesh have finalised the draft of a tripartite power trade agreement, the first of its kind initiative for development to create greater energy connectivity across the neighbourhood.
- The agreement which was agreed by the three countries is expected to be signed in the coming months.
- The agreement would enable Nepal and Bangladesh to send surplus power from one region to another via the Indian grid (which was a long-standing demand from Nepal and Bangladesh).
Key Points:
i.Earlier, the electricity trade with neighbouring countries was done under bilateral agreements.
ii.The finalisation of new guidelines for Cross-Border Trade of Electricity (CBTE) in recent years served as building blocks for the new arrangements.
iii.The guidelines of the agreement evolved after consultations with all stakeholders, allowing neighbouring countries to purchase and sell power through the Indian grid and participate in Indian power exchanges.
India’s Energy Co-operation with Neighbouring Nations:
Energy cooperation forms a key element of India’s ‘Neighbourhood First’ policy. India has constructed electricity transmission infrastructure in Nepal and Bangladesh and helped both countries to build cross-border pipelines.
Nepal:
i.The Prime Minister (PM) of Nepal, Pushpa Kamal Dahal alias Prachanda, was on a 4-day official visit to India from May 31 – June 3, 2023.
- Phase II of the Motihari-Amlekhgunj petroleum pipeline project was initiated to be built at a cost of Rs 183 crore. Click here to know more
ii.Pushpa Kamal Dahal and Prime Minister (PM) Narendra Modi unveiled plans to facilitate the export of hydropower from Nepal to Bangladesh. About 50 MW of hydropower would be exported at the beginning and it might be increased after the agreement was signed.
iii.During his first foreign visit to Nepal in 2014, PM Narendra Modi unveiled the “HIT” formula for forging links through highways, i-ways and trans-ways.
iv.India was already importing more than 450 MW of power from Nepal and the target is to take it to 10,000 MW. India also buys hydropower from Bhutan.
Bangladesh:
i.In March 2023, India and Bangladesh launched a Rs 377 crore cross-border pipeline which is expected to supply one million metric tonnes of diesel annually from Assam’s Numaligarh refinery to northern parts of the neighbouring country.
ii.The pipeline which is 132 km in length and a 127 km stretch within Bangladesh was built with an Indian grant.
Srilanka:
i.During the economic crisis in Sri Lanka, part of India’s support worth USD 4 billion consisted of lines of credit to help meet Colombo’s requirements for fuel and LPG.
- State-run Indian Oil Corporation (IOC) supplied fuel through its subsidiary Lanka IOC in June 2022.
ii.India and Sri Lanka also have agreed to jointly develop the oil tank farms in Trincomalee (Sri Lanka).
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On September 21, 2022, at the 25th Globoil Summit 2022, the apex edible oil industry associations from five major palm oil importing countries from Asia viz. India, Pakistan, Sri Lanka, Bangladesh and Nepal have formed an Asian Palm Oil Alliance (APOA).
