Nepal, India Sign Long-Term Power Agreement, MoU In Renewable Energy

Nepal on Thursday signed a long-term agreement for the export of 10,000 MW power to India, an MoU for cooperation in renewable energy, and jointly inaugurated three cross-border transmission lines during the two-day visit of the External Affairs Minister S Jaishankar to the Himalayan nation.

The agreement on power export that will facilitate the export of 10,000 MW of electricity to India in the next 10 years was inked during the 7th meeting of the Nepal-India Joint Commission here.

Nepal’s Energy secretary Gopal Sigdel and his Indian counterpart Pankaj Agrawal signed the bilateral agreement in the presence of Jaishankar and Nepal’s Minister for Energy, Water Resources, and Irrigation, Shakti Bahadur Basnet.

The two countries had reached an understanding on the electricity export during Prime Minister Pushpakamal Dahal Prachanda's visit to India from May 31 to June 3 last year. Both sides had signed several major pacts including one on increasing New Delhi's import of power from the neighbouring country to 10,000 MW in the next 10 years from the current 450 MW.

On Thursday, a memorandum of understanding for cooperation in renewable energy was also signed by the Nepal Electricity Authority (NEA) and National Thermal Power Corporation (NTPC) Limited, India.

The two ministers also jointly inaugurated, through remote control, three cross-border transmission lines that were completed with India’s assistance. These are the 132 kV Raxaul-Parwanipur, 132 kV Kushaha-Kataiya, and New Nautanuwa-Mainahia cross-border transmission lines, according to officials.

According to the newspaper MyRepublica, following Thursday’s agreement, various government and private entities in India will engage in power trade with Nepal through short-term, medium-term, and long-term contracts. “Private sector in Nepal can also participate in the import and export of electricity after completing the necessary procedures,” it said.

Nepal has already prepared an energy development strategy intending to produce 28,000 MWs of electricity in the next 12 years, the paper said, adding, “Of that, a target has been set to export 15,000 MWs to different countries including India.” Earlier, a delegation led by Agrawal paid a courtesy call on Basnet, when the Nepali Minister urged the Indian officials to accelerate other projects and complete them within the stipulated time, expecting Indian investment in large projects, MyRepublica said.

There are multiple well-endowed rivers originating in the higher reaches of the Himalayas – the four main being Mahakali, Karnali, Sapta Gandaki, and Sapta Kosi – flowing through different valleys and then cutting across plains before entering India to meet River Ganga.

India has helped Nepal develop multiple hydropower projects on these high-volume rivers and more projects are in the pipeline; and the power export agreement comes as the next step in the bilateral relations.

As per India’s Ministry of External Affairs documents, India and Nepal have robust cooperation in the power sector. Among the recent bilateral engagements is the Joint Steering Committee (JSC) on Power Cooperation which met last on Feb 23-24 in 2022.

Before it, in 2021, India rehabilitated a small hydropower plant in Jumla district of Nepal. The same year, India granted permission to the Nepal Electricity Authority (NEA) in November 2021 to sell its surplus energy under Cross Border Trade of Electricity (CBTE) guidelines issued in February 2021.

“Discussions focused on our overall bilateral ties, trade and economic relations, land, rail and air connectivity projects, cooperation in defence and security, agriculture, energy, power, water resources, disaster management, tourism, civil aviation, people to people and cultural exchange and development partnership,” Jaishankar posted on X following the Joint Commission meeting.

Nepal’s Foreign Ministry also took to X as it said, “Various aspects of Nepal-India relations were discussed on the occasion under the thematic areas of economic relations, connectivity, trade & transit, power and water resources, education and culture and political matters among others.”