Nepal has received permission to export more than 1,000 megawatts (MW) of electricity to neighboring India. Previously, India had only allowed Nepal to export up to 811 MW. Now, India has agreed to purchase an additional 200 MW.
The latest 200 MW export agreement is valid for four years, according to Rajan Dhakal, spokesperson for the Nepal Electricity Authority (NEA). However, this deal is not for year-round supply—India will buy electricity only during specific months each year.
This year, the additional 200 MW will be exported from August 11, 2025 (Shrawan 26, 2082 BS) to October 31 (Kartik 14)—a total of 82 days.
"This agreement is valid until 2028," said Dhakal. "Approval for the additional 200 MW was received on Monday, and we started exporting from the same day. Next year, exports will resume from June 15."
Nepal and India have been engaged in a medium-term power trade agreement for continuous electricity sales over five years. This time, however, the deal is for four years. The additional 200 MW will come from five hydropower projects: Likhukhola-2, Likhukhola A, Lower Solu, Thulo Khola, and Super Kabeli A.
Seasonal Export Strategy
After October, India will resume purchases only in the following year. Nepal also faces power shortages in winter (November onwards), so exports are limited to the wet season (monsoon).
"We can supply electricity until November, but India’s demand drops after October, so exports are only approved for that period," Dhakal explained.
Growing Power Trade with India and Bangladesh
Nepal has been exporting electricity to India since November 2021, starting with 39 MW. Over the years, exports have steadily increased.
Additionally, Nepal has started exporting 40 MW to Bangladesh since October 2024, using Indian transmission lines.
In total, Nepal is now permitted to export 1,050 MW (1,000 MW to India + 50 MW to Bangladesh).
Revenue and Future Goals
- In FY 2081/82, Nepal earned NRs 17.45 billion from electricity exports (NRs 17.19 billion from India + NRs 267 million from Bangladesh).
- During winter, Nepal still imports electricity from India (worth NRs 12.92 billion last year).
If Nepal could export 1,050 MW year-round, it could sell 9.20 billion units annually, earning over NRs 80.27 billion.
Long-Term Power Trade Agreement
Nepal and India signed a long-term power trade agreement in June 2023, aiming to export 10,000 MW in 10 years. This has boosted investor confidence in hydropower.
"If the government creates a favorable investment climate, Nepali investors alone can produce 10,000 MW," said Ganesh Karki, President of the Independent Power Producers’ Association of Nepal (IPPAN).
Government’s Hydropower Targets
- By 2035, Nepal aims to produce 28,000 MW, with 13,000 MW for domestic use and 15,000 MW for export.
- This requires an estimated NRs 4.6 trillion in investment.
Recent Policy Concerns
The government’s FY 2082/83 budget introduced a "Take-and-Pay" model for Run-of-River (RoR) projects**, replacing the previous "Take-or-Pay" system. This sparked protests from private developers, who argued it would discourage investment.
However, after backlash, the government rolled back the policy, ensuring continued investor confidence.
Current Power Situation in Nepal
- Installed capacity:Over 3,600 MW.
- Peak demand:2,200-2,300 MW.
- Current production: 3,000-3,100 MW (surplus during monsoon).
With India agreeing to buy Nepal’s surplus power, the country is moving towards becoming a regional energy exporter.
Key Takeaways:
✅ 1,000+ MW now allowed for export to India (up from 811 MW).
✅ Additional 200 MW deal for four years (seasonal supply).
✅ Bangladesh exports (40 MW) also growing.
✅ Long-term goal:10,000 MW in 10 years to India.
✅ Govt targets 28,000 MW by 2035 (15,000 MW for export).
✅ Policy stability crucial for investor confidence.
Nepal’s hydropower sector is poised for major growth, with India as a key market for surplus energy.
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