Nepal hydropower export to Bangladesh

India has blocked Nepal's request to export an additional 20 megawatts of hydropower to Bangladesh through its transmission grid. The refusal by India's NTPC Vidyut Vyapar Nigam Limited, reported by the Kathmandu Post, leaves a small but symbolically important energy deal in limbo.

Since 2024, Nepal has exported 40 MW of electricity to Bangladesh every June to November via India. The request for an extra 20 MW was declined in June, with the Indian power trading company reportedly citing capacity constraints on the India-Bangladesh transmission line. Talks in July between India and Nepal failed to resolve the issue.

Why Bangladesh wants Nepal's hydropower

Bangladesh seeks to diversify its energy mix. According to energy think-tank Ember, 98% of its 32 GW installed capacity relies on fossil fuels. The country aims to source 20% of its electricity from non-imported renewables by 2030.

Nepal and Bangladesh have complementary needs. The monsoon gives Nepal a hydropower surplus, while Bangladesh's demand dips in the dry winter when Nepal faces shortages. This makes year-round trade beneficial. Check our stats for more on regional energy generation.

"Hydropower from Nepal and Bhutan could provide Bangladesh with a cheaper source of electricity than many of the country's existing generation sources," says Shafiqul Alam, lead analyst for Bangladesh energy at the Institute for Energy Economics and Financial Analysis. Shahriar Ahmed Chowdhury, director of the Centre for Energy Research at United International University in Dhaka, calls the trade "economic sense."

However, Bangladesh's state minister for power, Aninda Islam Amit, tells Dialogue Earth that imported power does not count toward its domestic renewables target. He expects the private sector to lead on renewables development.

India holds the missing link

The existing 40 MW trade uses the Baharampur-Bheramara high-voltage DC link between India and Bangladesh. This line has a 1 GW transfer capacity. A Bangladesh Power Division official, speaking anonymously, said the link typically carries 920-930 MW, suggesting unused capacity.

Experts caution that spare capacity may not be available for Nepal's use. Nikit Abhyankar, an energy efficiency expert at UC Berkeley, notes that lines are rarely operated at full rated capacity. Some capacity must be reserved for peak demand and system failures. He estimates 40-50 MW could be lost to conversion and transmission losses on a 1 GW line.

Binit Das of the Centre for Science and Environment adds that India's Central Electricity Authority is cautious about running the line near its thermal limit, as it also carries India's own power exports to Bangladesh.

Alternate routes exist. Bangladesh imports nearly 1.7 GW from India through other interconnections. Manoj Silwal, former deputy managing director of the Nepal Electricity Authority, suggested Nepal could use other Indian lines. However, Abhyankar notes these corridors may also be fully utilized. For details on regional power infrastructure, see our fixtures page.

Politics complicates power trade

Geography dictates India's central role. "There is no other way that Bangladesh can get power from either Nepal or Bhutan without that being facilitated by India," says Bipul Chattopadhyay of India's Consumer Unity & Trust Society.

The 20 MW impasse contrasts with faster progress on bilateral deals. During the stalemate, India and Nepal agreed to raise Nepal's export quota to India from 1.1 GW to 1.65 GW.

"The asymmetry between how quickly that bilateral decision happened and how long the trilateral 20 MW has languished is itself the clearest evidence of where the region's integration problem actually sits," says Das.

Strained India-Bangladesh relations since Bangladesh's 2024 government change may also be a factor. The situation is further complicated by Nepal's own vulnerabilities. A late August flash flood damaged 12 hydropower plants and nearly 360 MW of capacity, according to a Nepal energy ministry official, potentially forcing Nepal to seek electricity from India. This could affect Nepal's standings as a growing energy exporter.