Nepal, India and Bangladesh signed a tripartite agreement allowing Nepal to sell 40 MW of electricity to Bangladesh using the land and infrastructure of India. Nepal Electricity Authority (NEA), Bangladesh Power Development Board (BPDB) and NTPC Vidyut Vyapar Nigam (NVVN) signed the agreement in Kathmandu yesterday.

Earlier,  in December 2023, Bangladesh had approved a proposal for a 40 MW electricity purchase from Nepal and the final inking of the agreement was delayed due to the toppling of Sheikh Hasina’s government in Bangladesh.  

According to the NEA, electricity generated from 25 MW Trishuli and 22 MW Chilime hydroelectricity projects will be exported to Bangladesh at the rate of 6.40 US cents. This agreement may facilitate about Rs. 1.22 billion earning annually for Nepal by exporting power to Bangladesh. The meter of the energy export will be in Muzaffarpur, India, and the losses up to that point would be borne by the NEA while losses from Mujaffarpur to the Bangladesh border would be the responsibility of the Bangladeshi company.

The tripartite power deal is a milestone in Nepal’s energy sector since Nepal’s hydroelectricity is being exported to the third country for the first time in Nepal’s history. According to Nepal’s Energy Minister Dipak Khadka, this is the outcome of the convening of the six successful meetings of the joint task force and joint steering committee after the signing of the MoU between Nepal and Bangladesh in 2018 and the continuous efforts afterwards.  Ambassador of India to Nepal Navin Shrivastav emphasized that this is a landmark agreement marking a significant step forward in promoting regional cooperation in power trade and also reflects India’s commitment to deepening cross-border connectivity in South Asia. NEA has set a target of exporting 10000 MW of electricity to India and 5000 MW to Bangladesh.