Nepal’s electricity exports to Bangladesh have effectively stopped after devastating floods damaged two hydropower projects that supply electricity to the country via India, reports The Kathmandu Post.
Nepal’s monsoon season is normally a period of abundant electricity generation. Heavy rains swell the rivers that power its run-of-river hydropower plants, allowing the country to generate more electricity than it consumes and export the surplus to neighbouring countries.
However, the floods that swept through the Bhotekoshi river system on August 26 have damaged hydropower projects and sharply reduced Nepal’s electricity exports.
Nepal had been exporting an average of about 1,000MW during the wet season. That figure has now fallen to around 650MW.
Bangladesh has been particularly affected as it only recently began receiving electricity from Nepal through the Indian grid.
Two hydropower projects authorised to supply electricity to Bangladesh — the 22.1MW Chilime Hydropower Project and the 24MW Trishuli Hydropower Project — were damaged and stopped generating electricity last week.
Chilime had approval to export 21.4MW to India, while Trishuli had approval for 18.6MW. Both projects were also authorised to supply electricity to Bangladesh through India. Nepal receives payment in US dollars for electricity sold to Bangladesh.
“Both projects supplying electricity to Bangladesh have been damaged, so we have asked India to allow electricity from another project to be sent as an alternative,” said Dirghayu Kumar Shrestha, acting managing director of the Nepal Electricity Authority.
“At present, electricity exports to Bangladesh are effectively at zero,” he said.
The damage has extended beyond the two projects. Generation has stopped at 12 hydropower projects since the floods.
The Nepal Electricity Authority has kept the Sanjen, Upper Sanjen and Salasungi projects in “isolated mode” after their transmission lines were damaged. This means the plants are operating outside the national grid and generating electricity only to meet demand in nearby areas.
Other export hurdles
The disruption to Nepal’s electricity exports is not solely the result of the floods.
At a time when Nepal would normally be exporting its largest volumes of electricity to India, it is also unable to export 73.75MW from three hydropower projects because India has yet to renew their export approvals.
The export approval for the 38.8MW Upper Chameliya Hydropower Project expired on June 30 and has not been renewed. Approvals for the 24.25MW Seti River and 10.70MW Upper Tadi Khola projects expired on July 31.
Until the approvals are renewed, the Nepal Electricity Authority cannot sell their combined 73.75MW output to India. The approvals have to be renewed annually.
India’s Central Electricity Authority is the designated agency responsible for approving electricity imports and exports. Nepal must obtain or renew the approval before electricity from individual projects can be exported.
The situation highlights the constraints Nepal faces as it seeks to establish itself as a regional power exporter after years of relying on electricity imports, particularly during the dry winter months.
Nepal has so far received Indian approval to export electricity from 37 hydropower projects, with a combined capacity of about 1,200MW. Chilime and Trishuli are among them.
Nepal sells surplus electricity to India through the Indian Energy Exchange’s day-ahead and real-time markets, as well as under bilateral medium-term power sales agreements with the Indian states of Haryana and Bihar.
The two countries conduct electricity trade through several transmission links, including the 400kV Dhalkebar-Muzaffarpur line and the 132kV Tanakpur-Mahendranagar, Kataiya-Kushaha, Raxaul-Parwanipur, Gandak-Ramnagar and Mainahiya-Sampatiya lines.
Bangladesh supply
The Bangladesh market adds another layer of complexity.
At a Nepal-Bangladesh energy secretary-level Joint Steering Committee meeting in Dhaka in November 2025, the two countries agreed to increase Nepal’s electricity exports to Bangladesh by another 20MW under their existing 40MW arrangement.
They also agreed to begin the necessary procedures. However, India subsequently said the additional 20MW could not be exported because of insufficient transmission capacity.
Nepal again asked India to approve the additional 20MW at a Nepal-India energy secretary-level Joint Steering Committee meeting in June.
The Nepal Electricity Authority has also sought approval to export electricity from other projects, including the 456MW Upper Tamakoshi Hydropower Project. However, Indian approval has not been forthcoming for projects involving Chinese investment, Chinese contractors or, in some cases, Chinese equipment.
Upper Tamakoshi is a prominent example. Although Indian companies were awarded contracts for its hydromechanical, electromechanical and transmission-line works, a Chinese company carried out the civil works. India has so far not approved the project’s electricity for export.
Nepal has repeatedly raised the issue at bilateral energy meetings.
The formal restriction applies to electricity generated by projects involving investment from third countries that share a land border with India but do not have a bilateral power-sector cooperation agreement with India.
In practice, however, Nepalese officials and energy-sector stakeholders say India has also been reluctant to approve exports from projects involving Chinese contractors or Chinese equipment, even when the projects are not Chinese-invested.
They argue that diplomatic engagement will be necessary if Nepal is to expand its electricity exports.
“Renewing or obtaining approval for electricity exports requires negotiations at different levels,” said former energy minister Kulman Ghising.
“Sometimes it is with officials, sometimes with the executive director and sometimes through the foreign ministry and embassy. Depending on the situation, we need to negotiate and focus on securing and renewing approvals for power trade,” he said.
Ghising said he had negotiated an agreement to sell 650MW to India at 5.45 Indian rupees per unit, but Nepal had been unable to increase that volume since then.
Seasonal dependence
The current disruption comes after Nepal began exporting electricity in 2021, marking a major shift for a country that had previously depended heavily on imports.
In the 2025-26 fiscal year, Nepal exported electricity worth Rs2,932 crore to India and Bangladesh. It imported electricity worth Rs1,023 crore from India during the dry season, leaving it with a net power-trade surplus of Rs1,909 crore.
The model depends heavily on Nepal’s seasonal rivers.
During the monsoon, abundant water allows hydropower plants to produce a surplus that can be exported. During the dry season, when river flows decline and domestic demand remains high, Nepal imports electricity from India.
The Bhotekoshi floods have disrupted that model at precisely the time when Nepal would normally be maximising its export earnings.
For now, the Nepal Electricity Authority is working to restore damaged generation and transmission infrastructure while seeking Indian approval to redirect electricity from other operational projects to Bangladesh.