A power trade agreement between Nepal and India has been renewed for the next three months.
The agreement, which used to be extended for a year annually, has been extended only for three months this time, informed Nabin Raj Singh, the spokesperson at the Ministry of Energy, Water Resources and Irrigation.
It used to be extended for one year previously.
“Nepal needs electricity before the rainy reason,” Singh told Nepalkhabar, “The electricity is abundantly produced with the start of the rainy season. Hence, the power trade deal has been extended till June for now.”
According to Singh, 500 megawatts of electricity will be imported through Muzaffarpur-Dhalkebar and 54 megawatts of electricity through Mahendranagar-Tanakpur transmission lines.
The Nepal-India power trade agreement had been inked in 2078 BS for five years. According to which, the 450 megawatts of electricity were exported and imported. As per the renewed agreement, 554 megawatts of electricity will be exported and imported.
The Nepal Electricity Authority (NEA) participates in two avenues for selling power to India. Firstly, it competes in the day-ahead market on the Indian Energy Exchange (IEX). Secondly, it has a mid-term agreement to sell directly to NTPC, a major Indian power company. This electricity is then resold within India by the NVVN.
As water levels in Nepal's rivers and streams recede, hydropower production will also decline in the dry season in Nepal.
Currently, electricity is being imported from India to meet the internal demands of Nepal.
The NEA has signed an agreement with IEX to import and export power in the open market. However, it had not been renewed. The agreement was set to expire in the coming week.
