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 Steering 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 7^th meetings of JSC and JWG on Nepal-Bangladesh Cooperation in Power Sector were held in Dhaka on 26-27 November 2025.

A tripartite Power Sales Agreement (PSA) to export 40 MW of electricity from Nepal to Bangladesh was signed on 3 October 2024 between the Nepal Electricity Authority (NEA), the Bangladesh Power Development Board (BPDB), and NTPC Vidyut Vyapar Nigam Ltd. (NVVN) of India.

The Agreement came into fruition with the commencement of the 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.

As per the Agreement, Nepal has been exporting 40 MW of electricity to Bangladesh each year from 15 June to 15 November.

Negotiations are also underway regarding the 683 MW Sunkoshi III hydropower project on a joint venture basis.