Preparations to sign a power trade agreement between the Governments of Nepal and Bangladesh are underway, with the Energy Ministry of Nepal finalizing a draft memorandum of understanding (MoU) on Nepal-Bangladesh energy cooperation.

The draft outlines protocols for conducting energy trade between the two countries, in line with the South Asian Association for Regional Cooperation (SAARC) Framework Agreement for Energy Cooperation, signed by SAARC member countries in November 2014, and contains provisions to form a joint technical team to conduct a study and develop a modality and mechanism for electricity trade between Nepal and Bangladesh.

The Energy Ministry will present the draft MoU to the Cabinet once it obtains approval from Nepal's Finance, Law and Foreign ministries. Mr. Dinesh Kumar Ghimire, Energy Joint Secretary, estimates that, upon Cabinet approval, Nepal and Bangladesh may sign the MoU.

Mr. Ghimire emphasized that a signed MoU will enable the two countries to start working toward a possible power trade.

Nepal and Bangladesh began holding discussions on power trading, including enhancement of power sector cooperation between Nepal, Bangladesh and India, during then-Energy Minister Radha Gyawali's visit to Bangladesh in August 2014. Mr. Gyawali lauded initiatives of the Government of Bangladesh for trilateral cooperation involving Bangladesh, India and Nepal for hydropower development and grid connectivity.

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