Nepal’s hydropower potential and the increasing energy needs of Bangladesh provide ample opportunities to enhance energy cooperation between the countries.
Nepal and Bangladesh signed a Memorandum of Understanding (MoU) on Cooperation in the Field of Power Sector between Nepal and Bangladesh on 10 August 2018. Under this MoU, a Joint Steeringg Committee (JSC) at the energy/power secretary level and a Joint Working Group (JWG) at the joint secretary level were established to facilitate collaboration and advance initiatives in the power sector.
The sixth JSC and JWG meetings were held in Kathmandu on 1-2 October 2024. As decided by the sixth JSC meeting, a tripartite Power Sales Agreement (PSA) between Nepal Electiricity Authority (NEA), Bangladesh Power Development Board (BPDB) and NTPC Vidyut Vyapar Nigam Ltd. (NVVN) of India was signed in Kathmandu on 3 October 2024. The signing ceremony was witnessed by Minister for Energy, Water Resources and Irrigation Hon. Deepak Khadka and Bangladesh’s Adviser for Environment, Forests and Climate Change, and Water Resources H.E. Ms. Rizwana Hasan. This landmark agreement marks a historic milestone in Nepal-Bangladesh relations and is expected to enhance regional and sub-regional energy cooperation in South Asia.
As per the agreement, 40 MW electricity from Nepal will be exported to Bangladesh annually from 15 June 15 to 15 November for five years. The electricity will be transmitted through the 400 KV Baharampur (India)–Bheramara (Bangladesh) transmission line.
The Agreement came into fruition with the commencement of export of 40 MW of electricity from Nepal to Bangladesh on 15 November 2024. This first-ever power flow was jointly inaugurated by Nepal’s Energy Minister Hon. Dipak Khadka, India’s Union Minister for Power H.E. Mr. Manohar Lal, and Bangladesh’s Power Adviser H.E. Mr. Fouzul Kabir Khan. The next export cycle is scheduled to begin from 15 June 2025.
Negotiations are also underway regarding the 683 MW Sunkoshi III hydropower project on a joint venture basis. The two sides during the JSC meeting have also agreed to facilitate the agreement between GMR Company of India and the Government of Bangladesh for the purchase of 500 MW of electricity from the 900 MW Upper Karnali Hydropower Project in western Nepal.
Besides, Nepal and Bangladesh are also signatories of the SAARC Framework Agreement for Energy Cooperation. In the Fourth BIMSTEC Summit held on 30-31 August 2018 in Kathmandu, Member States, including Nepal and Bangladesh, agreed to further intensify cooperation in energy sector, including energy trade.