Lanka to join India –Bangladesh-Nepal tripartite energy grid to avoid energy problems and develop the economy

The visit of President Ranil Wickremesinghe to India has significance in a number of spheres from development to strategic partnership with Sri Lanka's immediate neighbor. As India tries to move forward with stalled initiatives with its crisis-hit neighbour, Sri Lanka is keen on discussing energy, power and port projects according to Foreign Minister Ali Sabry.

India's support was critical for Sri Lanka when it almost ran out of dollars. It was embroiled in an unprecedented financial crisis that left the country struggling for essential imports including fuel and medicine.

It is noteworthy to mention India’s assistance at that time to overcome Sri Lanka's humungous crisis. Since the government could not afford thermal fuel to keep the country lit at night, it plunged into darkness. Also, hydro power generation was limited, triggering social unrest due to longer power cuts.

It was at that stage that the authorities realized the benefits of integrating into a combined power grid along with India and other countries in the region. This would instinctively come forward to rescue the country from a recurring power crisis.

Sri Lanka's government has now prioritised regional energy integration with grid connectivity between Sri Lanka and India. This is to be implemented by 2030, Power & Energy Minister Kanchana Wijesekara said, recently

The World Bank has been assisting the state-run Ceylon Electricity Board (CEB) in understanding the technical requirements and business models for the project, Wijesekara tweeted recently following a meeting with World Bank Director of Regional Integration Cecile Fruman and Country Manager Chiyo Kanda.

Regional energy integration has been discussed for more than two decades & the Government has made it a priority to implement the India-Sri Lanka grid connection by 2030. Sri Lanka can take the tripartite agreement between India Nepal and Bangladesh as a model to shape Sri Lanka’s role in reaching agreements with member countries of the region.

The move fits in with efforts by India to forge greater energy connectivity with Bangladesh, Bhutan, Nepal and Sri Lanka.
The three countries on the Indian Sub-continent India, Nepal, and Bangladesh have already finalised the draft of a tripartite power trade agreement. This agreement will allow these countries to share energy resources to meet their growing energy needs. It will also reduce the region's dependence on imported power sources and allow the countries in the region to export energy to their neighbours.
This is a development in line with New Delhi’s diligent work to forge greater energy connectivity across India’s neighbourhoods.
The three nations agreed to the proposed deal, the first of its kind, and it will be signed shortly. The accord will also satiate Bangladesh's and Nepal's long-standing requests for permission to trade electricity across the Indian system.

During Nepal Prime Minister Pushpa Kamal Dahal’s visit to New Delhi in June, he and his Indian counterpart Narendra Modi unveiled plans for India to facilitate hydropower export from Nepal to Bangladesh. Dahal said it would initially export 50 MW. However, it is said there is potential for this to be ramped up once the agreement is in place, the Indian media reported.

The action is consistent with India's recent efforts to strengthen energy ties with Bangladesh, Bhutan, Nepal, and Sri Lanka through electricity transmission networks and petroleum pipelines. They continued by saying that one underlying goal is to lessen neighbouring countries' reliance on China.

In the past, electricity trade with neighbours was done bilaterally. The finalisation of revised guidelines for Cross-Border Trade of Electricity (CBTE) in recent years served as building blocks for the proposed arrangements.

The guidelines evolved after consultations with all stakeholders, allowing neighbouring countries to purchase and sell power through the Indian grid and participate in Indian power exchanges. This streamlined policy framework will allow for more efficient and cost-effective power transmission between countries, create new business opportunities for companies, and increase access to affordable electricity for all countries involved.

“The neighbours can feed power into the Indian grid at one point and pull it out elsewhere. This can help a country like Nepal send surplus power from one region to another via India. There is an increased flow of energy and enhanced connectivity,” according to informed sources

The guidelines were drafted so that power from any Chinese-funded power plant is banned from trading on the Indian grid.
“India acts as a fulcrum and facilitator when the modes are decided by market forces. India also benefits from transit fee payments.
In addition to constructing electricity transmission infrastructure in Nepal and Bangladesh, India has helped build cross-border pipelines between both countries. South Asia’s first trans-border petroleum pipeline, linking Motihari in Bihar to Amlekhgunj in Nepal and built at a cost of ₹324 crore, was launched in 2019 and has supplied 2.8 million metric tons of diesel to Nepal.

During Nepali Prime Minister Dahal’s visit, the two sides broke ground for the second phase of this pipeline to be built for ₹183 crore. The two sides also agreed to build a second pipeline to link Siliguri in India and Jhapa in Nepal. In March this year, India and Bangladesh launched a ₹377-crore cross-border pipeline that supplies one million metric tonnes of diesel annually from Assam’s Numaligarh refinery to the northern parts of the neighbouring country. The pipeline is 132 km long and a 127 km stretch within Bangladesh was built with an Indian grant.

During the economic crisis in Sri Lanka, part of the $4 billion that India provided consisted of lines of credit. This was to help meet the needs of the government for fuel and LPG. State-run Indian Oil Corporation supplied fuel through its subsidiary Lanka IOC in June last year when petrol pumps in Sri Lanka turned dry. Sri Lanka and India have also agreed to jointly develop oil tank farms in Trincomalee amid growing concerns about China’s influence in the country.

When Modi made his first foreign visit to Nepal in 2014, just three months after assuming office, he unveiled the “HIT” formula forging links through highways, I-ways and trans-ways. He addressed Nepal’s key concerns - oil should be exported through pipelines instead of trucks, bridges should be built over shared rivers and facilities created for exporting electricity.

“As a result of this diplomatic manoeuvring, it has facilitated importing more than 450 MW of power from Nepal and the target is to reach 10,000 MW." India also buys hydropower from Bhutan and such energy cooperation forms a key element of India’s “Neighbourhood First” policy.

Following problems building an underwater transmission line, there is now a plan to construct an overhead power grid link with Sri Lanka. As in Nepal, state-run power companies have been asked to explore projects in Sri Lanka. 

The G20 summit to be held in September is expected to pass an India-backed declaration will give impetus to a supply chain security with an emphasis on regional cooperation. As part of these efforts, there are plans to set up a regional power grid comprising Myanmar, Bhutan, Bangladesh, Nepal and Sri Lanka.

Nepal and Bangladesh have agreed to try to start trading power from the upcoming wet season (June-November) with the export of 40–50MW electricity from Nepal, according to a member of the Nepali delegation to the bilateral talks held in Patuakhali, Bangladesh.
During the fifth meeting of the secretary-level Joint Steering Committee on energy cooperation between Nepal and Bangladesh the two sides agreed to start trading power by taking India, which lies between the two countries, on board.

The Nepal Electricity Authority, the Bangladesh Power Development Board and the NTPC Vidyut Vyapar Nigam Limited (NVVN) of India will finalise a tripartite agreement shortly, Prabal Adhikari, power trade director at the NEA, told the Post from Bangladesh.
If Nepal sells electricity to Bangladesh, it will be the country’s first power export outside India.

Sri Lanka could definitely follow suit with its proposed renewable energy schemes planned for the next ten years. The expectation is cheap power for all developing countries in the region to resuscitate their economies. (Sources Indian media and Nepali Media)