India endorses MoU to purchase 10,000 MW power from Nepal in ten years

Kathmandu, Sept 5: India has officially given its approval to a memorandum of understanding (MoU) concerning the purchase of electricity from Nepal. Under this agreement, India has agreed to import 10,000 megawatts (MW) of electricity from Nepal in the next ten years. According to Nepal’s ambassador to India, Dr Shankar Prasad Sharma, the federal Council of Ministers of India formally endorsed the agreement paper on the power trade with Nepal and India shared information about this trough social media X (twitter).

He said the decision would contribute to accelerating Nepal’s economic development and restructuring efforts. The MoU was initially signed between the two countries during Prime Minister Pushpa Kamal Dahal Prachanda’s latest visit to India (May 31-June 3, 2023) and at the time the Prime Minister termed the moment historic. Energy secretaries from both countries signed and exchanged the document. Following India’s latest decision to endorse the agreement, the energy secretaries from both neighboring nations will participate in a special ceremony to formally re-sign it.

Joint Secretary at the Ministry of Energy, Hydro Resources and Irrigation and Spokesperson for the Ministry, Madhu Prasad Bhetuwal said they were unofficially informed about the official decision of the Indian government to endorse the agreement and expect to receive an official confirmation regarding the decision. With the decision, door to export the electricity produced in Indian market in easy and smooth manner has been opened.

Nepal had been urging for power export in Indian market in short-term, mid-term and long-term. The Nepal Electricity Authority (NEA) has been exporting 452 megawatt electricity in Indian Energy market in a daily basis. Nepal and India had signed power trade agreement in 2014. The Indian Company, Satluj Jal Vidyut Nigam, is constructing 900-megawatt Arun III hydropower project. Although the Indian company, GandhI Mallikarjun Rao, has been saying to construct 900-megawatt Upper Karnali hydropower project, it has not been started yet.

Similarly, Indian company has forwarded necessary process for the construction of different projects including Lower Arun, West Seti and SR-6. An agreement has been reached between Nepal and India to construct some projects after preparing joint investment. Nepal has been making preparation to export 40 megawatt electricity in Bangladesh soon. The private sector has been demanding the government to grant permission of power trade. The proposed new electricity bill has made this arrangement. The Cabinet meeting held on August 29 had given permission to Energy Ministry to table the electricity bill in the Federal Parliament.