South Asia

Nepal and Bangladesh progress in talks for 40MW electricity export

Published: 12:59, 21 January 2024

Nepal and Bangladesh are making significant progress towards finalizing the tariff for the export of 40 megawatts (MW) of electricity from Nepal. The ongoing negotiations are expected to lead to the signing of a tripartite agreement involving Nepal, Bangladesh, and India, marking the first-ever power export from Nepal to Bangladesh.

The initiative gained momentum when Nepal's Premier Pushpa Kamal Dahal visited India in May-June of the previous year, where the southern neighbor committed to facilitating the export of 40MW electricity to Bangladesh. Due to the geographical presence of Indian territory between Nepal and Bangladesh, the involvement of India is crucial in shaping the dynamics of this energy trade.
Initially targeted for the last wet (summer) season starting in May of the preceding year, the export plan faced delays as the two nations encountered challenges in concluding negotiations. With the pending agreement on the tariff, Nepal is now anticipating the export of power in the upcoming wet season. This shift is particularly relevant, considering Nepal's potential need to import power from India during the dry (winter) season, as is customary.
Historically, Nepal has primarily exported power to India, but a significant development occurred when both Nepal and India, in principle, agreed to include Bangladesh as a partner in their energy cooperation efforts. This collaborative vision was outlined in the Joint Vision Statement on Power Sector Cooperation issued in April 2022.
While negotiations for the export of 40MW of power from Nepal to Bangladesh are ongoing, Bangladesh is expressing interest in securing additional power from its northern neighbor. Bangladesh currently generates approximately 25,000MW of electricity, yet this falls short of meeting the demand, which exceeds 30,000MW. As these discussions progress, the region anticipates further collaboration to address the growing energy needs and strengthen cross-border energy trade.