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The Union Cabinet has approved the proposal of the Ministry of Power for signing a Memorandum of Understanding (MoU) with member states of BIMSTEC for establishing BIMSTEC grid interconnections. The MoU will be signed at the 3rd BIMSTEC Energy Ministers’ Meeting that will be held in Nepal shortly.

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a sub-regional group of seven countries in South Asia and South East Asia lying in the littoral and adjacent areas of the Bay of Bengal viz. Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal. It was established on 6th June 1997 through the Bangkok Declaration. It is headquartered at Dhaka, Bangladesh.

Timeline

In 2005, during the first BIMSTEC Energy Ministers’ Conference held in New Delhi, a Plan of Action for Energy Cooperation in BIMSTEC was formulated. As a part of the plan, under the BIMSTEC Trans-Power Exchange and Development Project, a task force under the leadership of Thailand was formed comprising the representatives of member countries to come up with a report on draft MoU for grid interconnections.

After a total of five meetings, the draft MoU for the establishment of the BIMSTEC grid interconnection was finalised on March 16, 2015.

The leaders reached a consensus to expedite the signing of the MoU on BIMSTEC grid interconnection during the BIMSTEC Leaders’ Retreat, 2016 held in Goa.

In the fourth meeting of BIMSTEC held in January 2017, the MoU was discussed and finalised.

Salient features

The MoU provides a broad framework of cooperation for the implementation of grid interconnections for the purpose of carrying out trade in electricity. Its objective is to promote rational and optimal power transmission in the BIMSTEC region.

The MoU for the establishment of the BIMSTEC grid interconnection facilitates:

  • Optimization of energy resources in the BIMSTEC region for mutual benefits on non-discriminatory basis subject to laws, rules and regulations of the respective Parties;
  • Promotion of efficient, economic, and secure operation of power system by developing regional electricity networks;
  • Necessity of optimization of capital investment for additional capacity generation across the region; and
  • Power exchange through cross-border interconnections.

 

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Cabinet approves MoU for establishment of BIMSTEC Grid Interconnection

The Union Cabinet has approved signing of Memorandum of Understanding (MoU) for Establishment of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Grid Interconnection”.

The MoU will be signed among member states of BIMSTEC at the upcoming third BIMSTEC Energy Ministers’ Meeting to be held in Nepal.

Key Facts

  • The MoU provides broad framework for members to cooperate towards implementation of grid interconnections for electricity trade to promote rational and optimal power transmission in BIMSTEC region.
  • It also provides optimization of using the energy resources in the region for mutual benefits on non-discriminatory basis subject to rules and regulations, laws of member countries;
  • It also aims to promote efficient, economic, and secure operation of power system needed through the development of regional electricity networks.
  • It also highlights the necessity of optimization of capital investment for generation capacity addition across the region and power exchange through cross border interconnections.
Background
  • BIMSTEC is an international organisation involving a group of 7 countries from South Asia and South East Asia viz. India, Bangladesh, Sri Lanka, Bhutan, Nepal, Thailand and Myanmar.
  • The first BIMSTEC Energy Ministers’ Conference held in New Delhi in October 2005, had formulated the “Plan of Action for Energy Cooperation in BIMSTEC”.
  • In this plan, under the “BIMSTEC Trans-Power Exchange and Development Project”, Task Force led by Thailand, with representatives of member countries will give report on draft MoU for grid interconnections.
  • Since then total five meetings Task Force were held and the draft MoU for establishment of BIMSTEC Grid Interconnection was finalized in March 2015.
  • In the BIMSTEC Leaders’ Retreat 2016, held in Goa in October 2016, Leaders decided to expedite the signing of the MoU on BIMSTEC Grid Interconnection.

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