Three-Nation Partnership Powers Nepal’s Electricity Export to Bangladesh

Nepal has started exporting 40 megawatts of electricity to Bangladesh. The inaugural event was conducted virtually by Nepal’s Minister of Energy, Water Resources, and Irrigation, Deepak Khadka; India’s Power Minister, Manohar Lal; and Bangladesh’s Advisor to the Ministry of Power, Energy, and Mineral Resources, Mohammad Fozul Kabir Khan. This marks the expansion of Nepal’s electricity trade to a third country, beyond its existing trade with India.

The electricity produced in Nepal is transmitted to Bangladesh via India’s infrastructure. It is delivered through the first Nepal-India cross-border 400 kV Dhalkebar-Muzaffarpur transmission line to the Muzaffarpur substation in India. From there, it is sent to Bangladesh through the 400 kV Baharampur (India)–Bheramara (Bangladesh) transmission line.

The export of electricity to Bangladesh via India commenced at 12:30 PM. For this year (2024), the export will continue only until midnight on Friday, November 15. It will resume on June 15, 2025, during the next wet season.

India’s Central Electricity Authority (CEA) approved the export of 40 MW of electricity on Thursday, sourced from Nepal’s Trishuli (18.60 MW) and Chilime (21.40 MW) hydropower projects. The CEA has granted permission for this export until October 2029. Both projects were previously approved for electricity export to India.

The Nepal Electricity Authority (NEA) will sell 40 MW of electricity to Bangladesh during the six-month wet season (June 15 to November 15) for five years. The transaction will be conducted in US dollars, a first for Nepal, as its electricity trade with India has been in Indian rupees. The NEA will earn 6.40 US cents (equivalent to NPR 8.62 per unit at Friday’s exchange rate) per unit of electricity sold to Bangladesh.

For Friday alone, NEA expects to earn USD 28,160 (NPR 3.79 million) from the 11.5-hour export of 40 MW of electricity. The electricity price is determined at the Muzaffarpur node in India. The NEA will bear the technical losses in transmission from Dhalkebar to Muzaffarpur, while all charges and fees beyond Muzaffarpur, including transmission line costs, losses, and trading margins, will be covered by Bangladesh.

The export is enabled by a tripartite power sale agreement signed on October 3 between NEA, India’s NTPC Vidyut Vyapar Nigam (NVVN), and Bangladesh Power Development Board (BPDB). Following the agreement, NEA submitted the list of approved projects to India’s CEA for export clearance, which was granted on Thursday, allowing exports to begin the following day.

BPDB had issued a tender on December 31, 2023, for the purchase of 40 MW of electricity from Nepal for five years, as per the tripartite agreement among the three countries. NEA submitted its bid, including the proposed electricity rates, and the process moved forward upon approval of the bid.

This milestone highlights Nepal’s transition into a regional electricity market, leveraging its hydropower resources to generate income in foreign currency while promoting energy cooperation among neighboring countries.