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Nepal–Bangladesh Electricity Trade Route

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Registry record
Updated
2026-05-11

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Summary

Nepal's first electricity export to a country other than India. A trilateral arrangement routed through India's grid — making India simultaneously Nepal's competitor, buyer, and logistics gatekeeper.

Key Facts

Parameter Value
Tripartite PSA signed October 3, 2024
Parties NEA, Bangladesh Power Development Board (BPDB), NTPC Vidyut Vyapar Nigam (India)
First export 12 hours on November 15, 2024 (symbolic)
Full-scale exports began June 15, 2025
Export window June 15–November 15 each year (5 months)
Duration 5-year agreement (until Oct 2029)
Current capacity 40 MW
Agreed expansion 60 MW from June 2026 (+20 MW, pending India's CEA approval)
Tariff 6.40 US cents/unit
Currency USD (unlike India trade in INR)
Route Nepal → Dhalkebar–Muzaffarpur 400 kV → Baharampur–Bheramara 400 kV → Bangladesh

Revenue

Period GWh Exported Revenue
2024 (12 hours only) negligible —
Jun–Nov 2025 147.43 GWh USD 9.436 million (~NPR 1.35 billion)

Projects Supplying Bangladesh

NEA currently allocates output from Trishuli (25 MW) and Chilime (22 MW) — older NEA-owned plants — to the Bangladesh export quota. India's CEA has approved these specific 40 MW until October 2, 2029.

Expansion Trajectory

  • Nov 2025 (7th JSC meeting): Nepal and Bangladesh agreed to add 20 MW (total 60 MW) from June 2026
  • Bangladesh's long-term ambition: import 9,000 MW from Nepal by 2040
  • Alternative routes under study: Barapukuria, Panchagarh/Thakurgaon, Bheramara, Comilla corridors through India
  • Sunkoshi III (683 MW): Expert committee formed to evaluate this project specifically for Bangladesh supply
  • Upper Karnali (900 MW): GMR-developed project had a planned 500 MW PPA to Bangladesh — status uncertain after Sheikh Hasina's fall (Aug 2024)

Limitations & Controversies

India retains structural veto. Every MW to Bangladesh requires India's Central Electricity Authority approval and transits Indian lines. India is simultaneously competitor, buyer, and logistics gatekeeper — market diversification does not reduce political dependence.

Seasonal limitation. Exports only run June–November, perfectly overlapping Nepal's surplus window. The arrangement does nothing for dry-season revenue and is complementary to the Seasonal Arbitrage Trap, not a solution.

Small scale. At 40 MW (expanding to 60 MW), Bangladesh trade is a marginal share of Nepal's export portfolio. Bangladesh's ambition of 9,000 MW by 2040 is aspirational; no committed transmission corridor or financing exists for scale beyond the current trilateral arrangement.

Political fragility. Bangladesh's post-Hasina transition has stalled larger pipeline projects (Upper Karnali PPA, direct transmission studies). The 5-year PSA term (until October 2029) may not survive a major bilateral rupture.

Strategic Significance

  1. Buyer diversification. Reduces Nepal's monopsony dependence on India's IEX for export revenue
  2. USD pricing. Bangladesh trade in dollars hedges against INR-NPR forex risk — significant given Nepal Electricity Authority (NEA)'s NPR 2.5B forex losses in FY 2024/25
  3. India as gatekeeper. Every MW to Bangladesh requires India's Central Electricity Authority approval and transits Indian lines — India retains structural veto over Nepal's market diversification
  4. Seasonal limitation. Exports only run Jun–Nov, perfectly overlapping Nepal's surplus window — does nothing for dry-season revenue. The arrangement is complementary to the Seasonal Arbitrage Trap, not a solution to it
  5. Political fragility. Bangladesh's political transition (post-Hasina) has stalled larger pipeline projects (Upper Karnali PPA, direct transmission studies)

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