Bangladesh will not buy 500 megawatts of electricity from the Upper Karnali hydropower project. Import of electricity from Upper Karnali has been thrown into confusion after the Interim Government of Bangladesh decided to cancel all the agreements made under the Special Energy Act.

India had proposed to export electricity through a 117 km long 765 kV transmission line. Earlier, the Awami League-led government supported the proposal. But the interim government of Bangladesh has not shown any interest in implementing the proposal. 

Bangladesh Power Development Board (BPDB) Chairman Rezaul Karim said that the proposed agreement with GMR has also been canceled as the government has decided to suspend all contracts under the Special Energy Act. On 5 December 2024, the proposal was agreed between BPDB, NTPC Electricity Trading Corporation of India (NVVN) and GMR Upper Karnali Jalvidyut Limited. Negotiations began in 2016 and a letter of intent was issued in January 2020. GMR Upper Karnali Jalvidyut Limited had raised USD 5 million as security for the proposal. 

According to Pradyumna Upadhyay, the spokesperson of the investment board, GMR has not given any information about this formally. "We found out informally, but GMR has not informed about this, it is a matter of selling after production," he said, "It is an internal matter of GMR, it will not have any problem in proceeding with the process related to the Upper Karnali hydropower project."

In May 2023, the draft agreement was signed in the Bangladesh-India-Nepal Energy Secretary-level joint directorate committee meeting in the presence of Bangladesh Energy Secretary Mohammad Habibur Rahman and India's Energy Secretary Alok Kumar. In February 2025, Chairman of GMR Upper Karnali Jalvidyut Limited SN Barde expressed his desire to formalize the Power Sale Agreement (PSA) to export electricity from Nepal to the Energy Secretary of Bangladesh. Upper Karnali Jalvidyut Limited had proposed a 25-year sale with effect from 2029.

Meanwhile, the Board of Investment has sought an opinion from the Attorney General's Office regarding the financial management process of the 900 MW Upper Karnali Hydropower Project, which was awarded to the Indian company Mallikarjun Grandhi Rao (GMR). Filed about board members of the project 

Even though the writ was dismissed by the Supreme Court, the Attorney General's opinion has been sought as the full text has not yet been received. On 2 January 2081, GMR submitted documents related to financial management, but the Investment Board did not approve them.

The Indian Renewable Energy Development Agency (IREDA) has submitted a document to the Board of Investment stating that the Indian Renewable Energy Development Agency (IREDA) is positive to invest INR 65 billion in loans and a group of Nepali banks has given in-principle consent to invest INR 20 billion in loans. 

Board spokesperson Upadhyaya said that even the expert committee formed to study those documents has suggested that they can manage the finances saying that the documents are correct. In Upper Karnali, GMR will own 34 percent, Indian government company Sutlej Jalvidyut Vikas Nigam (SJVN) will have 34 percent, IREDA will have 5 percent and Nepal Electricity Authority will have 27 percent. The 60th meeting of the investment board approved the share structure change submitted by GMR. Earlier, GMR proposed 9 members to the board of Upper Karnali, but the board decided to retain 11 members.

3 members from GMR, 3 from SJVN, 1 from IREDA, 2 from Nepal Electricity Authority and 2 independent members (one should be a Nepali citizen) were decided by the board of Upper Karnali. Advocate Dan Bahadur Budha of Budhasubba Legal Research Proprietor filed a writ against the decision of the Investment Board. On 27 February 2008, the joint bench of Justice Sapna Pradhan Malla and Nityananda Pandey has decided to dismiss the writ.  As the full text of the

order has not been received, the opinion of the Attorney General's office has been sought on it, Board spokesperson Upadhyaya said. "Despite the decision, the full text has not been received," he said, "we have asked for an opinion whether to wait for the full text or to proceed with the further process, but nothing has come yet." "Ireda's 5 percent share is not yet clear. That 5 percent can be given to GMR and SJVN," he said, "However, it should be assumed that the financial management has already been done. IREDA issued a press release on January 3 saying that there is a joint venture (JV) agreement with GMR, SJVN and Nepal Electricity Authority.

Similarly, the 186 days lost due to the interim order issued after the Supreme Court case has been added to raise financial resources for the project. As the Supreme Court has already asked not to add time, it was mandatory to raise financial resources for the construction of the project by January 4. Earlier, the government had extended the deadline of 2 years for the financial management of the project on 31 June 2079. The decision was appealed to the Supreme Court. On 17 November 2079, the Supreme Court heard the writ and gave an interim order not to extend the deadline.

Then on the writ filed by Ratan Bhandari and others, on 24 Baisakh 2080, the Constitutional Bench of the Supreme Court gave a directive order to the Council of Ministers not to extend the deadline again. The Supreme Court upheld the extension of the deadline until the case was heard, but then it stopped the extension of the deadline. Earlier, GMR Company was repeatedly extended the deadline after failing to raise financial resources. It is mentioned in the order that 10 years have been given only to raise financial resources in Upper Karnali and the Supreme Court has said that this time is sufficient and should not be extended again.

A memorandum of understanding was signed between the government and GMR on 10 January 2064 for the survey of the Upper Karnali project and the construction of 300 MW of electricity. The government awarded the Upper Karnali to GMR under the Build, Own, Operate and Transfer (BOOT) model. GMR's proposal was considered the best among the international talks to build the project, and an agreement was reached between the then government and GMR to build the project in 2008.

On December 5, 2066, GMR applied to the Electricity Development Department to increase the maximum utilization from 300 MW to 900 MW. After the establishment of the Board of Investment in 2068, this project was decided by the Council of Ministers and placed under the office of the Board of Investment. Similarly, on 3 October 2071, a Project Development Agreement (PDA) was signed between the Investment Board and GMR.