Nepal and Bangladesh have agreed to jointly develop the Sunkoshi-3 Hydropower Project. The South Asian countries decided to build the 683 MW storage-type hydel with an aim to supply the generated power to Bangladesh during the fifth meeting of the secretary-level Joint Steering Committee (JSC) on energy cooperation held in Dhaka on Monday and Tuesday. Both sides have agreed that the Nepal Electricity Authority (NEA) and Bangladesh Power Development Board (BPDB) will sign a memorandum of understanding (MoU) for the development of the project within the next six months. The proposed project will be built in the area bordering the Kavrepalanchok and Ramechhap districts in central Nepal at an estimated cost of $1.45bn. In recent years, Bangladesh has been keen on energy cooperation with Nepal to meet its ever-increasing demand for electricity. Both countries had agreed to develop the Sunkoshi-3 through a joint venture investment during the fourth meeting of the working group in late August 2022. The JSC meeting also agreed to work on a tripartite agreement with India for the export of 40 MW of electricity from Nepal to Bangladesh. As Indian transmission lines have to be used to materialize the power export, both countries decided to bring the Indian agency on board. As per the understanding, NEA, BPDB, and NTPC Vidyut Vyapar Nigam Limited (NVVN) of India will finalize a tripartite deal. According to Madhu Bhetuwal, joint secretary at the Ministry of Energy, Water Resources and Irrigation, Bangladesh will notify India about the agreement reached with Nepal. "After completing the necessary process, the tripartite agreement will be signed as soon as possible," said Bhetuwal.

It's been a year since talks for electricity exports from Nepal to Bangladesh gained momentum. Nepal's quest for finding a market for its electricity beyond India was further emboldened after Bangladesh expressed readiness to import 40-50 MW of power from Nepal during the energy secretary-level JSC meeting of the two countries held in Kathmandu in the last week of August.

Nepal and Bangladesh last year agreed to request India for the passage of 40-50MW of electricity from Nepal to Bangladesh through the existing transmission infrastructure of India. Both sides have been making efforts to bring India on board for this purpose. In the fourth meeting, both sides agreed that Nepal would provide an environmental impact assessment report of the Sunkoshi III project to the Bangladeshi side and later would respond with its opinion. According to Bhetuwal, Nepal has already sent the feasibility study report and environmental impact assessment report of Sunkoshi III to Bangladesh. The steering committee meeting also discussed in detail the construction of hydropower plants in Nepal under the joint investment of Bangladesh and Nepal, the import of electricity from Nepal using existing interconnection grid lines over India, and the construction of new transmission lines. The joint technical team has been instructed to study the possible options and submit a report within 6 months for a dedicated transmission line between Nepal and Bangladesh. As part of the new transmission line to be constructed exclusively within the territory of India, the matter will be determined through the Bangladesh-India-Nepal tripartite agreement. The meeting also discussed the signing of a power purchase agreement (PPA) with Indian developer GMR Energy on the import of 500 MW of electricity from the 900MW Upper Karnali Hydroelectric Project. The Bangladeshi side has informed that PPA will be signed between BPDB and GMR soon. GMR received a letter of intent in 2019 to sell electricity to Bangladesh.