Indian power-trade guidelines discourages investors in Nepal

Bangladesh ready to invest $1 billion in hydro projects

Kathmandu, Jan. 27:

Acting Secretary of the National Natural Resources and Fiscal Commission Baikuntha Aryal said on Saturday that power investment opportunities in Nepal could be discouraged by the discriminatory cross-border power trade guidelines issued by India in 2016, which restricts private sector and third country hydropower developers in Nepal from exporting power to India. 

“Indian power trade guidelines might discourage domestic and foreign investors from making investments in large hydropower projects,” he said at the Nepal Power Investment Summit 2018 that began Saturday.

The guidelines says that only those companies owned by the Indian government or the public sector or private companies that have 51 per cent or higher Indian equity can export electricity to India.

According to Aryal, lack of transmission lines was another factor which has made investors more apprehensive as it creates uncertainty in evacuating energy from the projects. 

“But things are moving in the right direction as two 400 KV major cross border transmission lines - the Damauli-Butwal-Gorakhpur and Hetauda-Dhalkebar-Duhabi - are being developed. Private sector and foreign investors will be encouraged to invest in projects if the government could develop the transmission lines in time,” he said. 

He said that the government has given priority to transmission line development, but local obstruction and land acquisition challenges had delayed the projects. 

To develop the power sector in Nepal, the government has been preparing to develop a Project Management Law to deal with those kinds of hassles and facilitate the developers and investors.

In addition to all these efforts, there should be a tripartite agreement among Nepal, India and Bangladesh to give the necessary impetus to energy development in Nepal, said Aryal. 

On the occasion, Indian Ambassador to Nepal Manjeev Singh Puri, however, urged Nepal to develop projects and generate power, and the market would be automatically created as no one could stop power from flowing across the borders. 

“Nepal and India have long lasting power cooperation, and energy development in Nepal will benefit both the countries,” said Puri. 

Nepal currently has an installed electricity capacity of 991 MW against a demand of 1500 MW. It has been importing 380 MW of power from India to reduce the load-shedding hours.

Speaking on the occasion, Bangladeshi Ambassador to Nepal Mashfee Binte Shams said that the regional electricity trade were bilateral in nature, and based on this experience, trilateral and multilateral framework of energy trade needed to be developed.

“Power starving Bangladesh is ready to join hands with Nepal to harness hydroelectricity potential. We are looking for opportunities to invest US$ 1 billion in hydropower projects in Nepal,” she said.

She said that India had agreed to facilitate Bangladesh in its power trade with Nepal and Bhutan.

Bangladesh will require 34,000 MW of power by 2030 to sustain its current 7.8 per cent growth.

Published in The Rising Nepal on 28 January, 2018