A historic understanding reached between Nepal and India during Prime Minister Pushpa Kamal Dahal's four-day official visit to the southern neighbor has entered the cabinet of India.
During the official visit to New Delhi, a preliminary agreement was signed between the two parties for the purchase and sale of 10,000 megawatts of electricity in 10 years. The preliminary agreement has now been submitted to the Council of Ministers of India.
Dinesh Ghimire, the secretary at the Ministry of Energy, Water Resources and Irrigation, informed Nepalkhabar that the proposal was tabled in the cabinet meeting of India.
"During the follow-up discussion regarding the power trade understanding, we were informed that it has been submitted to the Council of Ministers of India," Ghimire said. "It's now inching closer to be signed officially."
During the Prime Minister's visit to India, Nepal proposed a 25-year power trade agreement. However, there was an agreement that India would purchase 10,000 megawatts of electricity in 10 years.
Indian Prime Minister Narendra Modi himself said in a joint press conference that India would purchase 10,000 megawatts of electricity in 10 years.
It appears that bilateral meetings should be held to develop this understanding into an agreement. The initial agreement was signed by the secretaries of Nepal and India.
The agreement will also be signed by the secretaries of India and Nepal.
Madhu Bhetwal, Director General of the Department of Electricity Development under the Ministry of Energy, says that the Council of Ministers of Nepal has already taken a decision to this effect.
"Even though India made an initial agreement, the cabinet has to endorse it," said he, "Now the proposal has reached the Council of Ministers of India."
He said that the process will gain momentum once it is endorsed by the Council of Ministers of India.
Currently, India has an agreement to purchase only 448 MW of electricity. This agreement has to be renewed every year.
Besides, Nepal is also preparing to proceed with the power trade agreement with Bangladesh. Nepal has to sign another tripartite agreement with India and Bangladesh to export electricity to Bangladesh.
At the Nepal-Bangladesh Energy Meeting held in Bangladesh a few months ago, Bangladesh agreed to purchase 40 MW of electricity from Nepal. It has hinted at purchasing more electricity in the future.
During the Prime Minister's visit to India, the Ministry of Energy had set a goal of discussing the expansion of a dedicated transmission line for long-term electricity export to Bangladesh. But the discussion could not take place.
But during the Prime Minister's visit to India, an agreement was reached on two more projects. The agreements include the construction agreement of 679 MW Lower Arun Hydropower Project and 480 MW Phukot Karnali Semi Reservoir Hydroelectric Project Development.
Sushil Bhatta on behalf of the Investment Board for Lower Arun and Nanda Lal Sharma on behalf of the development company Satluj Jal Vidyut Nigam (SJVN) signed the agreements.
The Investment Board Nepal has already approved investments worth 92.68 billion rupees for Lower Arun.
A Memorandum of Understanding (MoU) had been signed between the Office of the Investment Board and the Satluj Jal Vidyut Nigam (SJVN) when KP Sharma Oli was the Prime Minister.
The preparation of the Detailed Project Report (DPR) gained momentum in line with that agreement. Now, Nepal has signed a construction agreement with Satluj.
As per the agreement, Nepal will get 21.9 percent, i.e. 197.1 MW of electricity free of charge. The remaining electricity will be exported to India. Another project for which an MoU was signed in Delhi on Thursday is the semi-reservoir Phukot Karnali.
The Indian company NHPC will invest 51 percent in the semi-reservoir Fukot Karnali project, according to the agreement. The Nepal-based Power Production Company Limited will invest 49 percent in it. It is estimated that 93.2 billion rupees will be required for the construction of this project.