India, Nepal, and Bangladesh Inaugurate First Trilateral Power Transaction via Indian Grid

In a landmark development for regional cooperation, India, Nepal, and Bangladesh have officially inaugurated the first trilateral power transaction, marking a significant step towards strengthening energy ties between the three nations. The virtual event, hosted by Nepal’s Ministry of Energy, Water Resources, and Irrigation, saw the participation of Union Minister for Power and Housing & Urban Affairs, Manohar Lal, alongside Md. Fouzul Kabir Khan, Adviser, Ministry of Power, Energy and Mineral Resources, Bangladesh, and Dipak Khadka, Minister of Energy, Water Resources, and Irrigation, Nepal.

The historic event marks the successful flow of electricity from Nepal to Bangladesh through the Indian power grid, representing a critical milestone in energy collaboration in the South Asian region. This transaction is a direct outcome of the commitment expressed during the visit of Nepal’s Prime Minister, Pushpa Kamal Dahal ‘Prachanda’, to India from May 31 to June 3, 2023. During the visit, both countries agreed to further enhance regional energy cooperation, with the aim of boosting economic inter-linkages for mutual benefit.

Historic Power Deal Between Nepal, Bangladesh, and India

The Government of India had previously announced the facilitation of this trilateral power transaction, with an initial export of up to 40 MW of electricity from Nepal to Bangladesh, transmitted through the Indian grid. The decision was made during the bilateral discussions between India and Nepal, emphasizing a shared vision of greater sub-regional energy cooperation. The arrangement is designed to enhance energy security and foster economic growth by connecting the power grids of these neighboring countries.

Tripartite Power Sales Agreement Signed

To formalize the agreement, a tripartite power sales agreement was signed on October 3, 2024, in Kathmandu. The agreement was executed between NTPC Vidyut Vyapar Nigam (NVVN), Nepal Electricity Authority (NEA), and the Bangladesh Power Development Board (BPDB). This agreement outlines the terms for the power supply from Nepal to Bangladesh, passing through India’s electricity grid, thus paving the way for a seamless energy exchange between the three nations.

This deal is expected to serve as a model for future energy transactions between South Asian countries, illustrating how regional cooperation can strengthen energy security and economic ties. The arrangement is also seen as a significant move towards regional integration in the energy sector, reducing dependence on non-renewable resources and supporting sustainable energy solutions.

Boosting Regional Connectivity and Cooperation

The commencement of this power flow from Nepal to Bangladesh through India is expected to significantly boost regional connectivity and energy cooperation. This new energy link will not only strengthen the power sectors of the three nations but also facilitate the exchange of renewable energy resources, such as hydroelectric power from Nepal, which can be harnessed by Bangladesh, helping to meet its growing energy demand.

In addition to the immediate power transaction, this trilateral initiative is expected to serve as a stepping stone for further energy collaboration, including shared infrastructure, power grid synchronization, and joint energy projects. It aligns with the broader vision of regional integration in the South Asian region, where energy is seen as a key enabler for economic development and stability.

Strengthening Sub-Regional Energy Ties

This trilateral power transaction comes at a time when India, Nepal, and Bangladesh are actively working to expand their regional cooperation, particularly in the energy sector. The successful flow of electricity between Nepal and Bangladesh via India is viewed as a major step toward increasing sub-regional energy cooperation and creating a more integrated power grid across South Asia.

The integration of power grids will allow for the efficient transfer of electricity between the three countries, helping to balance supply and demand and mitigate the risk of power shortages, especially in remote areas. Moreover, this power transaction is expected to lead to cost savings and enhance the sustainability of energy systems in all three countries by enabling access to a wider variety of energy sources, including clean and renewable energy.

A Step Towards Sustainable Regional Development

The power flow from Nepal to Bangladesh via India is part of a broader regional effort to ensure sustainable development and address the pressing energy needs of South Asia. The collaboration reflects the countries’ shared commitment to advancing the goals of sustainable energy and climate resilience in the region.

By facilitating the exchange of hydroelectric power from Nepal to Bangladesh, the deal also supports the global transition to cleaner energy sources and reduces reliance on fossil fuels. Nepal’s abundant hydroelectric potential, combined with Bangladesh’s growing energy demands, makes this arrangement an ideal example of how regional cooperation can contribute to the achievement of international climate and development goals.

Looking Ahead: Opportunities for Further Collaboration

Looking ahead, this trilateral power exchange marks just the beginning of what is hoped to be a long-term and evolving partnership between the three countries in the energy sector. There are opportunities for further expanding energy trade, particularly as the countries explore other renewable energy sources, such as solar and wind, and consider new infrastructure investments to support growing energy demands in the region.

In the future, this initiative could also serve as a model for other countries in the region, encouraging further integration of energy markets and fostering a shared commitment to regional sustainability. Enhanced connectivity through energy cooperation can lead to economic benefits, greater energy security, and more resilient power systems across South Asia.

Conclusion

The inauguration of the first trilateral power transaction from Nepal to Bangladesh through the Indian grid is a significant milestone in regional cooperation and energy integration. This groundbreaking development not only strengthens the power sectors of the three nations but also sets the stage for greater sub-regional cooperation in energy, infrastructure, and sustainable development. The tripartite agreement between Nepal, India, and Bangladesh underscores the potential for cooperation to meet growing energy needs while promoting a cleaner, more resilient energy future for all.

As the three countries continue to deepen their ties in the energy sector, this first power transaction is expected to pave the way for more collaborative projects, creating a robust framework for regional energy security and economic growth in South Asia.