Nepal seeks to sign 25-year electricity deal with India during PM Prachanda's visit, says report

Though the official date of Mr. Prachanda's visit to India is yet to be announced, reports say the Prime Minister is likely to travel to New Delhi after the second week of April

File photo of Nepal’s Prime Minister Pushpa Kamal Dahal, also known as Prachanda. Reports on April 2 said Nepal may forward an inter-governmental agreement as an agenda item ahead of the Prime Minister’s trip. | Photo Credit: Reuters

Nepal is keen to sign a 25-year agreement with India on selling its surplus power to the neighbouring country during Prime Minister Pushpa Kamal Dahal Prachanda's expected visit to New Delhi.

Though the official date of Mr. Prachanda's visit to India is yet to be announced, the Kathmandu Post newspaper, quoting Nepali officials, reported on April 2 that the Prime Minister is likely to travel to New Delhi after the second week of April.

However, the two sides have yet to announce the dates, it said.

“We are preparing a proposal for the Indian side on the 25-year agreement. But a lot also depends on whether the Indian side agrees to include our proposal in the agenda,” the report quoted a senior official at the Energy Ministry as saying.

Dinesh Ghimire, secretary at the ministry, said the issue of the long-term inter-governmental agreement was under discussion at the ministry but was yet to be forwarded to Nepal’s Foreign Ministry to make it an agenda item ahead of the Prime Minister’s trip.

He said such an agreement can be signed only if the Indian side gives its nod at the bureaucratic level before Prachanda reaches New Delhi, the report said.

Nepal proposed such a deal during the 10th secretary-level meeting of the Joint Steering Committee (JSC) on Energy Cooperation in India in late February.

“During the meeting, it was decided that Nepal would make a proposal which India would examine,” said Prabal Adhikari, power trade director at the Nepal Electricity Authority (NEA), who was also in the Nepali delegation.

At the JSC meeting in Mount Abu, Rajasthan in February, Nepal and India inked an agreement to increase the power import and export capacity through the Dhalkebar-Muzaffarpur transmission line from 600 megawatts to 800 megawatts.

An agreement to import and export 70 to 80 MW of electricity from Tanakpur-Mahendranagar 132 KV (kilovolt) power transmission was also signed between the two sides.

They agreed to set up the necessary mechanisms to export power from Nepal to Bihar during the rainy season through the existing 132 KV transmission line.

Currently, Nepal is allowed to sell 452.6 MW of electricity generated by 10 hydropower projects in the Indian power markets. The Himalayan nation awaits approval for more projects from Indian authorities to export electricity.

Mr. Adhikari said an inter-government agreement could also pave the way for selling power to India irrespective of whether a third country has invested or is involved in a particular project.

Currently, India has been refusing to buy electricity from projects that involve Chinese investors or contractors, the report said.

Nepal produces surplus energy during the wet (summer) season while it has to buy electricity from India during the dry (winter) season.

NEA Managing Director Kul Man Ghising believes the country will be self-sufficient in hydropower even during the dry season by 2026.