Kathmandu, June 26: The Bangladesh government has cancelled an agreement to purchase 500 megawatts of electricity from Nepal's 900-megawatt Upper Karnali Hydropower Project.

The Bangladesh Power Development Board (BPDB) has cancelled the initial Power Supply Agreement (PSA) to purchase electricity from this project, following the Bangladesh government's decision to suspend all agreements under the Special Powers Act.

Indian companies GMR Energy Limited and SJVN are constructing this project on the Karnali River, bordering Achham, Surkhet, and Dailekh districts.

The Bangladesh government has taken this decision at a time when tensions between India and Bangladesh have recently escalated, with both countries creating trade barriers that are affecting each other's economies.

Bangladesh's local newspaper The Daily Observer said, "There is strategic and geopolitical interest in Bangladesh in using the 117-kilometre-long 765 kV high-voltage transmission line proposed by India." The interim government has not shown any desire to move forward with the projects agreed upon by the previous Awami League government.

People’s News Monitoring Service.