Nepal, India ink power trade deal

 Kathmandu, Jan. 4

Nepal and India have signed a pact on a long-term electricity trade materialising the Memorandum of Understanding (MoU) signed between the two countries during the visit of Nepal's Prime Minister Pushpa Kamal Dahal Prachanda to India during May-June 2023.

The agreement, that will facilitate about 10,000 Megawatts electricity to India in a decade, has been signed at the high-level seventh Nepal-India Joint Commission meeting held in Kathmandu on Thursday.

Energy secretaries of Nepal and India Gopal Sigdel and Pankaj Agrawal signed the agreement in the presence of Minister for Energy, Water Resources and Irrigation, Shakti Bahadur Basnet. The JC meeting was co-chaired by Minister for Foreign Affairs, NP Saud of Nepal and Minister for External Affairs, Dr. S Jaishankar of India.

The Government of Nepal has formulated an Energy Development Strategy with an aim to generate 28,000 MWs electricity in the next 12 years, and more than half of it would be exported to India and other regional markets.

Being the nearest market as well power-hungry developing bordering states Bihar and Uttar Pradesh, India is the most favourable destination for Nepal in terms of energy trade although discussions are underway also with Bangladesh and China. Bangladesh has been expressing interest to invest in a project worth US$ 1 billion and import electricity from Nepal.

A MoU for Co-operation in the Renewable Energy Development Between Nepal Electricity Authority (NEA) and NTPC Limited was also signed during the meeting.

Likewise, the Ministry of Foreign Affairs (MoFA) informed that the two ministers also jointly inaugurated, in virtual mode, three 132 kV cross-border transmission lines between India and Nepal, namely, the second circuit of Raxaul-Parwanipur line, the second circuit of Kataiya-Kusaha line, and the New Nautanwa-Mainhiya line. These infrastructures will facilitate in seamless flow of electricity between the two countries.

 

Rs. 200 million grant projects

Likewise, the meeting also exchanged the agreement between Government of Nepal and Government of India regarding Indian Grant Assistance for Implementation of High Impact Community Development Projects (HICDPs). Maximum budget of such projects would be Rs. 200 million each.

The new agreement has replaced the earlier Small Projects Development Grant Agreement signed in August 2008 and renewed on August 9, 2023.

It was signed by Finance Secretary, Dr. Krishna Hari Pushkar and Indian Ambassador to Nepal, Naveen Srivastava in the presence of FM Saud and EM Dr. Jaishankar.

According to the Ministry of Finance (MoF), projects under the Indian grant would be as per the demands of the local bodies or other government agencies under the inspection and recommendation of such demands by the Ministry of Federal Affairs and General Administration (MoFAGA) of Nepal to the MoF. The Finance Ministry would request the Government of India for grant support to implement such projects on the basis of priority.

"Even in the case of the non-government organisations, the projects should be recommended by the line ministry and approved by the Social Welfare Council with the consent from the MoF," read a statement issued by the MoF on Thursday. These projects will be implemented by included in the budget of the respective level of the government with a tripartite agreement between the MoFAGA, Embassy of India in Kathmandu and concerned implementation agency. As per the new provisions, project implementing rural municipality should contribute 5 per cent and municipality 10 per cent counterpart fund. There would be a project monitoring committee including federal and local stakeholders and representative from the Embassy of India in Nepal.

 

India to launch Nepal's Munal

Meanwhile, Nepal Academy of Science and Technology (NAST) and New Space India Limited (NSIL) signed an agreement for the launch services for Munal Satellite on Polar Satellite Launch Vehicle (PSLV).

According to the Kathmandu University High School (KUHS), Munal is a part of the High School Consortium Satellite Project, done in collaboration between Nepal Academy of Science and Technology (NAST), Nepal, and the International Institute of Space Technology for Economic Development (INSTED), Thailand. High School Consortium Satellite Project’s goal is to develop the world’s first high school CubeSat constellation.

The CubeSat name Munal from Nepal is being developed at Space Systems Laboratory (SSL) located at KUHS.

Similarly, handover of fifth tranche of the post Jajarkot-earthquake relief supply provided by the Government of India was also handed over to Nepal during the meeting. In addition, India will provide financial assistance package for post Jajarkot-earthquake reconstruction.

Meanwhile, the Ministry of External Affairs (MEA) of India said in a post in X that various aspects of Nepal-India relations were discussed on the occasion under the thematic areas ranging from economic relations to people to people relations.

Dr. Jaishankar termed the JC meeting 'a comprehensive and productive'.

Discussions of the meeting were focused on our overall bilateral ties, trade and economic relations, land, rail and air connectivity projects, cooperation in defense and security, agriculture, energy, power, water resources, disaster management, tourism, civil aviation, people-to-people  and cultural exchanges and development partnership.

However, issues like the new air-route, border management and trade deficit reduction couldn't see any progress.

The India-Nepal Joint Commission was established in 1987 and provides a platform for both ministers to review all aspects of the bilateral partnership. But it remained largely inactive till 2014.

Flurry of meetings

After his arrival, Minister Dr. Jaishankar paid a courtesy call to President of Nepal, Ramchandra Poudel at his office in Sheetal Niwas.

Spokesperson of the President's Office, Shailaja Regmi Bhattarai informed in a statement that during the meeting the President emphasized on paying serious attention to the impacts of climate change in Nepal and the world and taking a collective initiative to protect the Himalayas and environment.

President Paudel and Dr. Jaishankar talked about the bilateral relations between the two countries, mutual interests and common concerns. The President also said that the connections between the two countries were based on natural, cultural and religious heritages so they should be mobilised and protected for the greater benefit of the people of Nepal and India.

Dr. Jaishankar also called on Prime Minister Prachanda at his residence in Baluwatar where the two discussed about the possible economic and other cooperation in future. The visiting minister of India said in X that PM Prachanda recalled his successful visit to India in June 2023 which has imparted a new momentum to the ties between the two countries. He has also taken the JC meeting as a follow-up to that visit.

"Friendship is indeed unique (between Nepal and India), and our partnership is moving from strength to strength," said Dr. Jaishankar

He also called on former prime minister and President of the Nepali Congress, Sher Bahadur Deuba and former PM and Chair of CPN-UML, KP Sharma Oli.

Dr. Jaishankar arrived Kathmandu on Thursday morning leading Indian delegation to the JC meeting and will leave for New Delhi on Friday afternoon. 

Published in The Rising Nepal daily on 5 January 2024.