Bangladesh has canceled its preliminary supply agreement to buy electricity from Nepal’s 900 MW Upper Karnali Hydropower Project amid diplomatic tensions with India.
Bangladesh’s government has revoked the preliminary supply agreement (PSA) to purchase electricity from Nepal’s Upper Karnali Hydropower Project, which has a capacity of 900 megawatts. The cancellation was announced by Bangladesh Power Development Board (BPDB), the state electricity agency.
Following the government’s decision to suspend all agreements made under the Special Powers Act, the power supply agreement with Indian company GMR Energy Limited was also canceled.
The project is being constructed on the Karnali River bordering the districts of Achham, Surkhet, and Dailekh by Indian company GMR Energy Limited in partnership with the state-owned SJVN.
This decision by Bangladesh is linked to recent diplomatic and trade tensions between India and Bangladesh. Bangladesh has expressed strategic concerns over India’s proposal to use a 117-kilometer long, 765 kV high-voltage transmission line.
BPDB Chairman Mohammad Rezaul Karim said that the interim government in Bangladesh has suspended all agreements under the Special Powers Act without showing much enthusiasm for the project initiated by the previous Awami League government. As a result, the agreement with GMR was canceled.
The issue became public in February 2025 after a GMR Energy official wrote to Bangladesh’s Energy Secretary urging completion of the PSA process. The plan had proposed supplying electricity to Bangladesh for 25 years starting from 2029.
This article was originally published on bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
