The agreement, signed by representatives of the Nepal Electricity Authority (NEA), India’s NTPC Vidyut Vyapar Nigam, and the Bangladesh Power Development Board, is a significant leap forward for cross-border energy trade. The energy, sourced from Nepal’s hydroelectric plants, is transmitted through India’s Dhalkebar-Muzaffarpur transmission line. This infrastructure facilitates energy transfer from Nepal to India, which then channels an equivalent amount to Bangladesh.
Bangladesh’s energy portfolio heavily relies on fossil fuels, with renewable sources like hydroelectric power comprising a mere fraction of its generation capacity. The addition of Nepalese hydroelectricity is seen as a vital step toward diversifying its energy mix. Experts in Bangladesh have lauded the deal for bolstering energy security and reducing the carbon footprint of the country's power sector.
For Nepal, the deal signifies a lucrative venture, with annual revenue projections of around NPR 330 million. The five-month supply window—spanning from mid-June to mid-November—takes advantage of surplus hydroelectric production during Nepal’s monsoon season. Beyond financial benefits, the agreement underscores Nepal’s growing prominence in regional energy collaboration.
Indian authorities have facilitated this agreement by allowing the use of its grid, emphasizing India’s pivotal role in fostering regional interconnectivity. Officials from all three countries praised the agreement as a significant step toward future sub-regional energy partnerships. Beyond economic implications, the collaboration has been hailed as a model for sustainable development and renewable energy adoption in South Asia.