Nepal has initiated the export of 40MW of electricity to Bangladesh, utilising India’s power grid in a landmark move on regional energy cooperation.

The move also marks India’s pivotal role as an important facilitator in South Asian electricity trade, as reported by Reuters.

The commencement of power exports is a result of an agreement signed in October 2024 by the Nepal Electricity Authority, the Bangladesh Power Development Board and NTPC Vidyut Vyapar Nigam from India.

The tripartite arrangement enables the seamless transnational flow of electricity across these nations.

Nepal’s Energy Minister Dipak Khadka stated that the country is also exporting 80MW to Bihar state in India’s east.

According to the minister, these power exports have opened up a 5GW export market for the country.

India plays a significant part in these dynamics as it both imports and exports electrical power within the region.

It supplies electricity to neighbours such as Nepal, Bangladesh and Myanmar while drawing power from countries such as Nepal and Bhutan.

Discussions are ongoing over connecting its grid with that of Sri Lanka to further integrate regional energy networks.

This development coincides with rapid advancements in Nepal’s hydropower capabilities.

Indian company Satluj Jal Vidyut Nigam (SJVN) is currently developing a 900MW Arun-3 hydroelectric project located in the Sankhuwasabha district of Nepal.

In April 2025, agreements were forged between India’s Power Grid Corporation and the Nepal Electricity Authority aimed at establishing high-capacity cross-border transmission lines that will support future power exchanges between the two countries.

With an installed capacity exceeding 3GW, of which hydroelectricity comprises 95%, Nepal is actively seeking investments from Indian entities to enhance its hydropower production capacities.

The goal is to meet domestic demands then generate surplus for export purposes, primarily targeting New Delhi’s expanding market demand.