Nepal’s plan to export 40 megawatts of electricity to Bangladesh starting June 15 may face delays. The main reason is that Bangladesh has not yet opened a letter of credit (LC), which is a payment guarantee required for the deal.
Officials at the Nepal Electricity Authority (NEA) said the export was planned as per a tripartite agreement signed last year among Nepal, India, and Bangladesh. However, Bangladesh’s Power Development Board (BPDB) has still not paid for last year’s exported power.
Rajan Dhakal, spokesperson for the NEA, confirmed that the power supply is scheduled to begin next week. But the final steps in the payment process are still pending. “BPDB has sent a draft of the LC, and we have given feedback,” he said. “The process is close to being completed.”
The agreement between the three countries allows Nepal to sell electricity to Bangladesh for five months each year—between June 15 and November 15—using transmission lines in India. This deal was a major breakthrough for Nepal, marking the first time its electricity would reach a third country beyond India.
The route used for this power transfer involves sending electricity through Nepal’s Dhalkebar–Muzaffarpur 400kV line to India. From there, it flows through India’s Berhampur–Bheramara 400kV line into Bangladesh.
Nepal’s exports were officially launched on November 15, 2024. On that day, 470,000 units of electricity were sent to Bangladesh, generating $30,080 in revenue. However, BPDB has not yet cleared this payment. At the time, BPDB had asked to pay both last year’s and this year’s dues together, and NEA agreed.
Due to delays in 2024, exports happened for only 12 hours—from noon to midnight—on November 15. Because of the short window, no LC was opened that year.
Under the current agreement, Nepal will export 18.60MW from its Trishuli project and 21.40MW from Chilime, totaling 40MW. This setup has been approved by India’s Central Electricity Authority, with the deal valid until October 2, 2029.
NEA has signed a five-year power sale deal with BPDB. The electricity will be sold at 6.40 US cents per unit. Payment will be made in US dollars. NEA will deliver the power at Muzaffarpur in India, taking responsibility for technical losses until that point. Bangladesh will bear all other costs, including transmission charges and trading margins.
A three-way agreement among NEA, India’s NTPC Vidyut Vyapar Nigam (NVVN), and BPDB manages the export. NEA had submitted its list of power projects for approval to India on October 9, 2024, and began the process only after receiving the green light.
Earlier, on January 1, 2024, BPDB had issued a five-year tender to buy 40MW of electricity from Nepal under this trilateral system. NEA responded with the required documents, including tariff details, which led to the final agreement.
Despite the progress, experts warn that delays in payment and incomplete paperwork could damage trust among the countries involved. They urge all parties to finalize the LC quickly to ensure the export begins as planned on June 15.
This power trade represents a major shift in Nepal’s energy future. As it ramps up hydropower production, finding new markets like Bangladesh is key. The deal also shows how regional energy cooperation can benefit all sides—if commitments are met on time.
