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A memorandum of understanding (MoU) for the establishment of a regional power grid interconnection involving seven countries will be nailed down shortly.
The deal will be signed in the upcoming summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
The draft of the MoU has been finalised, M Shahidul Islam, secretary general of the BIMSTEC, told the FE.
The agreement aims to create the common grid for the seven countries of the grouping to facilitate power trade.
The draft MoU will be placed for signing at the Kathmandu summit.
The establishment of the power grid will be "a game changer" in the economic cooperation among the seven countries, he added.
Established in 1997, the BIMSTEC is a sub-regional group of seven countries, including India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.
The draft was finalised in January 2017 in the task force meeting held in Naypyidaw.
Initially, it was decided that energy ministers of the member countries would sit in Kathmandu in February this year to sign the MoU.
But later the member countries have decided to sign the agreement in the upcoming summit, he informed.
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 the BIMSTEC region.
It also provides optimisation of using the energy resources in the region for mutual benefits on non-discriminatory basis subject to rules and regulations, laws of member countries, the BIMSTEC official said.
The common grid also aims to promote efficient, economic, and secure the operation of power system needed through the development of regional electricity networks.
According to Mr Islam, the MoU highlights the necessity of optimisation of capital investment for generation capacity addition across the region and power exchange through cross-border interconnections.
The idea of the power grid was initiated when the first BIMSTEC energy ministers' conference was held in New Delhi in October 2005.
The meeting approved the "Plan of Action for Energy Cooperation in BIMSTEC."
A taskforce on the "BIMSTEC Trans-Power Exchange and Development Project," led by Thailand was formed after the meeting to formulate the report on draft MoU for grid interconnections.
The taskforce finalised the draft MoU for the establishment of BIMSTEC grid interconnection through five meetings.