The fate of importing 500 megawatts (MW) of electricity from Nepal’s 900MW Upper Karnali Hydropower project is hanging in the balance as government is set to scrap the accord as it has decided to suspend all agreements under the Special Powers Act.

Bangladesh also raised the geopolitical concerns as India had proposed using its 117-kilometre-long, 765kV high-voltage transmission corridor to transport the electricity-raising logistical and strategic questions for Dhaka.

However, official sources said the interim government showed little interest in advancing a project initially backed by the previous Awami League-led administration.

Meanwhile, the issue came to surface while, GMR Upper Karnali Hydropower Ltd (GUKHL) Chairman S.N. Barde sent a letter (in February 2025) to Bangladesh’s Power Secretary, expressing interest in formalizing the Power Supply Agreement (PSA) to export electricity from Nepal to Bangladesh.

GUKHL proposed a 25-year power supply agreement starting in 2029 under the now-defunct Special Power Act.

However, the tripartite PSA was finalized and initialed on December 5, 2024, between BPDB, India’s NVVN (NTPC Vidyut Vyapar Nigam), and GUKHL. Negotiations began in 2016 and led to a Letter of Intent (LoI) in January 2020. GUKHL also deposited USD 5 million as proposal security.

The draft agreement was signed during the 23rd Bangladesh-India-Nepal steering committee meeting in Khulna in May 2023, attended by Power Division Secretary Md Habibur Rahman and Indian Power Secretary Alok Kumar.

In the letter to BPDB, GUKHL also pointed to the recent successful 40MW trilateral electricity trade among Bangladesh, Nepal, and India as a model.

In 2024, Bangladesh signed an MoU with an Indian company to import 500 mw power from Nepal. GMR Energy in India has started a project to produce 900MW of hydropower. The Bangladesh Power Development Board has signed a MoU with GMR Energy to buy electricity from the project through a cross-country grid via India.

Bangladesh also expressed its interest to invest in the hydro-power projects jointly with Nepal to open power import business in near future.

“Bangladesh is being working on a project to import 500 MW of electricity from Nepal via India. India has executed a MoU with GMR Upper Karnali Hydropower Ltd (GUKHL),” said an official.

“The government has decided to suspend all agreements under the Special Power Act. Therefore, the proposed deal with GMR has also been cancelled,” Bangladesh Power Development Board (BPDB) Chairman Engr Rezaul Karim told the media.

“The cancellation comes as part of the government’s broader move to terminate power and energy contracts signed under the Special Power Act, many of which have already been revoked by the current administration,” official said.

Source: Observerbd