Nepal, India, and Bangladesh have signed a trilateral agreement to trade 40 megawatts of electricity.

The historic deal, signed in Kathmandu on Thursday, allows Nepal to sell electricity to a third country for the first time. So far, Nepal’s energy trade has been taking place only with the southern neighbour India.

The agreement was signed by Kulman Ghising, executive director of the Nepal Electricity Authority, Renu Narang, CEO of India's NTPC Vidyut Vyapar Nigam, and Mohammad Rezaul Karim, chairman of Bangladesh Power Development Board amid a function in Kathmandu.

Energy Minister Deepak Khadka, Minister of State for Energy Purna Bahadur Tamang, and Bangladeshi Minister for Forest, Environment, Climate Change, and Water Resources Syeda Rizwana Hasan witnessed the signing of the deal.

As per the agreement, Bangladesh will now import 40 megawatts of electricity from Nepal. The Indian side has also been involved in the trade deal as Nepal’s electricity will be transmitted to Bangladesh through the transmission infrastructure on the Indian territory. Nepal and Bangladesh are not territorially linked to each other.

Nepal is estimated to sell 144,000 MWh (megawatt-hour) of electricity in five months—mid-June to mid-November—at the rate of 6.4 US cents a unit.

Originally scheduled for July 28, the signing was postponed due to political tension and a change of government in Bangladesh.

For now, Nepal will transmit the energy to India through the 400KV Dhalkebar-Muzaffarpur cross-border transmission line and before India transmits the equivalent to Bangladesh. The NEA will calculate the quantum of exported energy at the Mazaffarpur point. The NEA estimates an earning of around Rs330 million for the country through the sale.