For Nepal, the monsoon season is usually a time of electricity abundance. Heavy rains swell the rivers that drive its run‑of‑river hydropower plants, enabling the country to generate more power than it consumes and sell the surplus to neighbours. This year, however, the same rivers have brought disruption.
The devastating flood that tore through the Bhotekoshi river system on 26 August shut down multiple hydropower projects and sharply reduced Nepal’s electricity exports. Bangladesh, which only recently began importing Nepali power through the Indian grid, has been hit particularly hard: exports to the country have effectively stopped, reports The Kathmandu.
Nepal had been exporting an average of about 1,000 megawatts during the wet season. That figure has now dropped to around 650 MW. The setback comes as Nepal seeks to establish itself as a regional power exporter after years of relying on imports, especially in the dry winter months.
Two projects authorised to supply Bangladesh — the 22.1 MW Chilime Hydropower Project and the 24 MW Trishuli Hydropower Project — have been damaged and stopped generating electricity since last week. Chilime had approval to sell 21.4 MW to India, while Trishuli had approval for 18.6 MW. Both were also cleared to supply Bangladesh via India, with Nepal receiving payment in US dollars.
“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.”
The damage extends beyond those two plants. Since the flood, generation has ceased at 12 hydropower projects. The Sanjen, Upper Sanjen and Salasungi projects have been kept in “isolated mode” because transmission lines were damaged, meaning they are operating outside the national grid and supplying only nearby demand.
Exports have also been constrained by regulatory delays. At a time when Nepal would normally be sending its largest volumes to India, the country cannot export 73.75 MW from three projects because India has yet to renew their approvals. The export licence for the 38.8 MW Upper Chameliya Hydropower Project expired on June 31 and has not been renewed. Approvals for the 24.25 MW Seti River and 10.70 MW Upper Tadi Khola projects expired on 31 July.
Until export approvals are renewed, the Nepal Electricity Authority (NEA) cannot sell a combined 73.75 MW to India. These approvals, which must be renewed annually, are issued by India’s Central Electricity Authority, the designated agency for cross‑border electricity trade. Nepal must secure or renew approval before power from individual projects can be exported.
The lapse highlights the constraints Nepal faces even as it seeks to expand regional power trade. So far, India has cleared exports from 37 hydropower projects with a combined capacity of about 1,200 MW, including Chilime and Trishuli. 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 agreements with the states of Haryana and Bihar. Transmission links include the 400‑kV Dhalkebar‑Muzaffarpur line and several 132‑kV connections at Tanakpur‑Mahendranagar, Kataiya‑Kushaha, Raxaul‑Parwanipur, Gandak‑Ramnagar and Mainahiya‑Sampatiya.
The Bangladesh market adds further complexity. At a Nepal‑Bangladesh Joint Steering Committee meeting in Dhaka in November 2025, the two countries agreed to increase Nepal’s exports to Bangladesh by 20 MW under an existing 40 MW arrangement. India later said the additional supply could not be accommodated due to transmission constraints. Nepal raised the issue again at a Nepal‑India Joint Steering Committee meeting in June.
The NEA has also sought approval to export electricity from other projects, including the 456 MW Upper Tamakoshi Hydropower Project. But India has not cleared projects involving Chinese investment, contractors or equipment. Upper Tamakoshi is a prominent example: although Indian firms handled hydromechanical, electromechanical and transmission works, a Chinese company carried out the civil works. India has yet to approve its electricity for export.
Nepal has repeatedly raised the matter at bilateral energy meetings. Formally, India restricts exports from projects involving investment from third countries that share a land border with India but lack a bilateral power‑sector cooperation agreement. In practice, however, Nepali officials and energy stakeholders say India has also been reluctant to approve projects with Chinese contractors or equipment, even without direct Chinese investment. They argue that diplomatic engagement will be essential to expand 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.”
Ghising said he had negotiated an agreement to sell 650 MW to India at 5.45 Indian rupees per unit, but Nepal has been unable to increase that volume.
The current disruption comes after Nepal began exporting electricity in 2021, marking a shift for a country that had long depended on imports. In the 2025‑26 fiscal year, Nepal exported electricity worth Rs29.32 billion to India and Bangladesh, while importing Rs10.23 billion from India during the dry season, leaving a net surplus of Rs19.09 billion.
The model depends on Nepal’s seasonal rivers: abundant monsoon flows generate surplus power for export, while reduced winter flows force imports. The Bhotekoshi floods have disrupted that model at the very time Nepal would normally maximise export earnings.
