Nepal's power exports hit a record, then the flood tested the surplus

For most of its history Nepal bought electricity from India and rationed what it had at home. In the fiscal year that ended in mid-July, it sold more power abroad than ever before. The Nepal Electricity Authority (NEA) earned Rs 29.32bn (about $189m) from exports to India and Bangladesh in FY 2025/26, up 68% from Rs 17.45bn a year earlier.

Volumes rose almost as fast as revenue. Nepal exported 3.88bn units (kilowatt-hours) of electricity, against 2.38bn the year before, at an average price of Rs 7.56 a unit. Imports, which Nepal still needs in the dry winter months, fell by almost a third to 1.15bn units, costing Rs 10.55bn. Netting the two, the NEA reports a gain of Rs 18.76bn from cross-border trade.

How the power is sold

The electricity goes out through three channels. The NEA sells into the day-ahead and real-time markets of the Indian Energy Exchange, under bilateral deals with NTPC Vidyut Vyapar Nigam, India's state power trader, and through a trilateral arrangement that carries Nepali power across Indian lines to Bangladesh.

The scale is new. India first allowed Nepal to sell it 39 MW in October 2021. Within four years export capacity during the wet season exceeded 1,000 MW. A long-term power trade agreement signed with India on 4 January 2024 sets an ambition of 10,000 MW of exports within a decade.

Bangladesh remains a small but symbolic buyer. Nepal sells it 40 MW each year between 15 June and 15 November, at 6.40 US cents a unit, generated by the Trishuli and Chilime plants. A further 20 MW agreed in principle last November has not materialised: India's Central Electricity Authority has withheld approval, citing transmission constraints, the Kathmandu Post reported in June.

The flood

The weakness in this model is that nearly all of Nepal's power comes from rivers, and rivers can turn. The glacial flood that tore down the Bhotekoshi and Trishuli valleys on 26 August damaged about a dozen hydropower projects. The NEA estimated that 431 MW of generation was knocked off the grid, and that projects under construction with a combined 470 MW were also damaged. (The human toll of that disaster is covered here.)

Exports to Bangladesh were suspended because the plants that supplied them, Chilime and Trishuli, were among those hit. The NEA asked India to allow the Bangladesh contract to be served from other plants.

Sales to India held up better than expected. Between mid-August and mid-September Nepal exported 565.6m units and earned Rs 5.09bn (about $33m). Achyut Babu Ghimire, an NEA director, told Xinhua that earnings for the month were still higher than in the same month a year earlier, despite the damage.

Winter is the real test

The monsoon is when Nepal has power to spare. In winter, snow-fed rivers shrink just as demand for heating peaks, and Nepal has always had to import. With several large plants out of action, analysts quoted by Mongabay expect winter imports to rise, eroding part of last year's gain.

India has already moved to help. Its power ministry approved supplying Nepal with 654 MW for 18 hours a day until 31 December, with a review in December of arrangements for the new year, Al Jazeera reported.

The record year therefore needs reading with care. It shows that Nepal's surplus is real and that Indian buyers will take it. It also shows that the surplus is seasonal, concentrated in a few river basins, and dependent on Indian approval for every additional megawatt that crosses the border. Nepal's installed capacity was 3,591 MW at the end of FY 2024/25, against peak domestic demand of about 2,409 MW. Officials still speak of exporting 15,000 MW eventually. The flood is a reminder of how much new capacity, spread across how many valleys, that would require.