Cabinet approves BIMSTEC MoU for cross-border power grid interconnections

Cabinet approves BIMSTEC MoU for cross-border power grid interconnections

The agreement will optimise power transmission in the region

The Dollar Business Bureau 

A Memorandum of Understanding (MoU) on grid interconnections for smooth power sharing infrastructure in the South Asian region was finalised by seven partner countries of BIMSTEC in January 2017. Bangladesh, Myanmar, Nepal, Bhutan, Thailand, Sri Lanka and India had together initiated the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in 2005 to formulate the "Plan of Action for Energy Cooperation in BIMSTEC". 

Giving a nod to a proposal forwarded by the Ministry of Power on April 12, the Cabinet approved the signing of "Memorandum of Understanding for Establishment of the BIMSTEC Grid Interconnection". 

Negotiations for the agreement have been ongoing for years. During the period, a total of five meetings were held under the banner 'Task Force for BIMSTEC on Trans-power Exchange', to reach consensus. Once a draft MoU was finalised by the task force (led by Thailand and comprised of representatives from all countries) in March 2016, the member nations decided to expedite the process and eventually ratified the agreement during the 4th meeting of BIMSTEC Senior Officials on Energy in January 2017. 

The agreement is said to improve regional connectivity in terms of power transmission, resulting in greater trade in energy, which will be mutually beneficial to all the parties. The treaty revolves around furthering the objective of realising a rational and optimal energy network in the BIMSTEC region. 

The benefits of this MoU include optimal usage of energy resources in the region to create synergies in accordance with the rights and laws of member nations, which laying the groundwork for cross border flow of electricity. It would boost regional electricity networks by making them more efficient and economic. Optimisation of capital expenditure in adding generation capacity would also be facilitated by the agreement. 

The Dollar Business Bureau - Apr 13, 2017 12:00 IST