Kathmandu: In a landmark moment for regional energy cooperation, Nepal, India, and Bangladesh signed a historic tripartite agreement for the purchase and sale of electricity.
The agreement, signed at an official ceremony in Kathmandu on Thursday, paves the way for Nepal to sell electricity to Bangladesh through India’s transmission network, opening a new market for Nepal’s surplus electricity.
The agreement was signed by Kulman Ghising, Managing Director of the Nepal Electricity Authority (NEA), Renu Narang, Chief Executive Officer of India’s NTPC Vidyut Vyapar Nigam (NVVN), and Mohammad Rezaul Karim, Chairman of the Bangladesh Power Development Board (BPDB). The event was attended by Nepal’s Minister for Energy, Water Resources, and Irrigation, Deepak Khadka, State Minister Purna Bahadur Tamang, and Bangladesh’s interim Environment, Forest, and Climate Change Minister, Sayeda Rizwana Hasan.
Under the terms of the agreement, Nepal will export 40 megawatts of electricity to Bangladesh annually during the monsoon season from June 15 to November 15, a period when Nepal’s hydropower generation peaks.
The electricity will be transmitted via the first cross-border 400 kV transmission line between Dhalkebar (Nepal) and Muzaffarpur (India) before reaching Bangladesh through the 400 kV Baharampur (India)–Bheramara (Bangladesh) transmission line.
The agreement, which marks Nepal’s first electricity trade with a third country, is expected to generate annual revenue of approximately USD 9.2 million for Nepal. The electricity price has been set at 6.40 US cents per unit, with Nepal exporting a total of 144,000 megawatt-hours (MWh) of electricity over the five-month period.
“This is a historic deal for Nepal, as it opens the door for us to export electricity to Bangladesh and earn significant revenue,” said Kulman Ghising, NEA’s Managing Director. “The agreement also signifies regional collaboration in energy trading, a key milestone for South Asia.”
The deal faced initial delays due to political unrest in Bangladesh, including student protests that led to the resignation of former Prime Minister Sheikh Hasina.
Bangladesh Ambassador to Nepal, Salahuddin Noman Chowdhury, said the importance of the agreement for Bangladesh, which has been grappling with energy challenges.
“This agreement will greatly ease our energy shortages, and cooperation on cross-border transmission systems will further enhance energy security for both countries,” he said.
Indian Ambassador to Nepal, Naveen Srivastava, praised the agreement as a landmark moment in regional cooperation. “By using India’s transmission network to facilitate power trade between Nepal and Bangladesh, this deal sets a new precedent for South Asia. It highlights the potential for mutual benefits in the region,” he said.
The electricity will primarily be sourced from Nepal’s Trishuli (25 MW) and Chilime (22 MW) hydropower projects, both of which have already received approval for electricity export to India. NEA will cover the technical transmission losses along the Dhalkebar–Muzaffarpur section, while Bangladesh will bear the costs of transmission beyond Muzaffarpur, as well as any trade margins and taxes.
By the time the electricity reaches the Bangladesh border, the cost per unit will be approximately 7.6 cents. The Nepal Electricity Authority will receive 6.40 cents per unit at the Muzaffarpur point. Payments will be made in U.S. dollars, minimizing currency exchange risks for Nepal.
This tripartite agreement marks a significant step forward in Nepal’s efforts to export its surplus electricity and enhances regional cooperation in South Asia’s energy sector, high-ranking officials present in the agreement ceremony said.
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