Nepal to begin historic electricity export to Bangladesh, strengthening regional cooperation

KATHMANDU: In a landmark move for Nepal’s energy sector, the country will begin exporting electricity to Bangladesh this Friday, marking the first time Nepal sells electricity outside of India. Under the recently finalized trilateral agreement, Nepal will supply 40 megawatts (MW) of electricity to Bangladesh, following approval from India. This historic export will be inaugurated at 12:45 p.m. by the energy ministers of Nepal, India, and Bangladesh through a virtual launch, according to Nepal Electricity Authority (NEA) Executive Director Kulman Ghising.

Friday’s electricity export will be a one-day transaction this year, running until midnight, and is expected to generate around NPR 3.8 million (USD 28,400) in revenue for Nepal within approximately 11 hours. NEA spokesperson Chandan Kumar Ghosh confirmed that with India’s clearance, Nepal is fully prepared to supply Bangladesh with power generated by its Trishuli (25 MW) and Chilime (22 MW) hydropower projects.

This collaboration highlights the growing potential for energy trade between Nepal, India, and Bangladesh, with anticipated revenue from monthly sales projected at NPR 3.3 billion (USD 24.5 million). Over a five-month period, NEA estimates that the 144,000 megawatt-hours (MWh) of electricity exports to Bangladesh will generate USD 9.2 million at a rate of 6.4 cents per unit. This agreement showcases Nepal’s ambition to become a regional energy player and open doors for future exports, potentially transforming its hydropower sector into a major economic contributor.

Nepal and Bangladesh have agreed on an annual electricity supply period from June 15 to November 15. This year, Friday’s one-day export will set the foundation for next year’s longer-term trading schedule. After years of negotiations, Nepal and Bangladesh achieved this electricity sales agreement, making Friday’s export the culmination of six years of diligent planning.

NEA’s export will leverage the Dhalkebar-Muzaffarpur 400 kV transmission line, Nepal and India’s first cross-border energy link. From Muzaffarpur, the electricity will travel through India’s network to Bangladesh via the Baharampur-Bheramara 400 kV line. This complex infrastructure network underscores the level of collaboration and trust among the three nations in advancing regional energy trade.

For Nepal, this sale is groundbreaking as it marks the first time the country will trade in U.S. dollars rather than Indian rupees, setting a precedent for future cross-border transactions and opening new revenue streams for the country. NEA projects monthly revenue of NPR 3.3 billion from electricity exports to Bangladesh, further bolstering Nepal’s foreign currency reserves.

As the first export partner beyond India, Bangladesh is excited to diversify its energy sources with Nepal’s clean hydropower. Nepal’s rich hydropower resources, backed by favorable geographic conditions and dedicated investment, have set the stage for substantial economic growth, contributing to clean energy goals in neighboring countries as well. This sale represents a win-win for both Nepal and Bangladesh, with Nepal achieving new financial and economic milestones and Bangladesh accessing an affordable, reliable power source to fuel its own development.

This electricity export lays the groundwork for expanding Nepal’s energy trade, showcasing its potential as a leading clean energy provider in South Asia. By tapping into hydropower’s economic value, Nepal is advancing toward its vision of sustainable growth and regional collaboration. Friday’s milestone, marked by unity and shared aspirations, symbolizes a brighter, more connected future for Nepal and its neighbors.