Nepal Launches First International Electricity Exports to Bangladesh via India’s Grid

Historic Export Commences, Marking Nepal’s Entry into Global Energy Markets

Kathmandu, June 2025 — Nepal has begun exporting 40 megawatts (MW) of electricity to Bangladesh through India’s interconnected power grid, a milestone in the country’s transition from an energy importer to an exporter. This initiative represents Nepal’s inaugural foray into the international energy market, leveraging its hydropower resources to supply neighboring nations.

The project, coordinated through regional grid infrastructure, enables electricity generated in Nepal to flow into Bangladesh via India’s transmission network. This tripartite arrangement underscores growing regional energy cooperation, as South Asian countries seek to optimize power distribution and address supply gaps.

Regional Grid Integration Facilitates Cross-Border Trade

Nepal’s ability to transmit electricity across borders relies on India’s established grid connectivity. The 40 MW export, while modest compared to regional demand, establishes a framework for future expansions. Bangladesh, facing seasonal electricity shortages, gains access to a new energy source, while Nepal capitalizes on surplus hydropower capacity.

The agreement highlights the potential for South Asia to reduce reliance on fossil fuels by sharing renewable energy. Nepal, endowed with vast untapped hydropower potential, aims to develop projects that can scale up exports in coming years. However, the current 40 MW volume reflects the initial phase of this cross-border initiative, with infrastructure and regulatory coordination still in development.

Economic and Strategic Implications for Nepal’s Energy Sector

For Nepal, the export signifies a strategic shift toward monetizing its natural resources. Historically dependent on energy imports, the nation now positions itself as a regional energy supplier. The move aligns with its long-term goals to boost hydropower generation, which currently accounts for over 90% of its electricity production.

Government officials emphasize that this first export agreement lays the groundwork for future deals. By demonstrating its capacity to deliver reliable power, Nepal aims to attract investment in large-scale hydropower projects, which could amplify export volumes. However, challenges remain, including grid modernization and intergovernmental agreements to formalize cross-border transactions.

Bangladesh’s Energy Security Gains a New Supply Source

Bangladesh, which has prioritized diversifying its energy mix to support industrial growth, now integrates Nepalese hydropower into its grid. The 40 MW contribution, though small relative to the country’s total consumption of over 15,000 MW, provides a proof-of-concept for future imports. The deal also reduces Bangladesh’s reliance on costlier imported fuels and aligns with its climate commitments to increase renewable energy use.

The success of this pilot could incentivize similar agreements with Nepal, particularly as both nations seek to strengthen energy security. Bangladesh’s energy planners have previously identified cross-border imports as critical to meeting rising demand, projected to grow by 7-8% annually.

Regional Cooperation and Future Prospects

The initiative underscores the potential for South Asian energy integration. By sharing resources through existing infrastructure, countries can mitigate shortages without significant upfront investment in new grid systems. India, serving as the transit hub, reinforces its role as a regional energy hub while enabling bilateral agreements between Nepal and Bangladesh.

Nepal’s energy ministry has stated ambitions to expand exports to 100 MW within three years, contingent on hydropower project completions and grid upgrades. However, progress will depend on resolving technical and bureaucratic hurdles, such as standardized pricing mechanisms and real-time grid monitoring systems.

Conclusion: A Stepping Stone for Regional Energy Collaboration

The commencement of Nepal’s first international electricity exports marks a pivotal moment for the country’s energy sector. By leveraging its hydropower assets and regional grid connectivity, Nepal not only diversifies its economy but also contributes to a more interconnected South Asian energy landscape. As the region navigates climate goals and energy demands, this agreement sets a precedent for collaborative solutions to power shortages. Future expansions will test the viability of such cross-border frameworks, positioning Nepal as a key player in the evolving regional energy market.