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An agreement has been reached between Nepal and India to increase the power import and export capacity from existing 600 to 800 MW through the first international Dhalkebar-Muzaffarpur 400 KV transmission line. This was agreed at the meeting of the Energy Secretary-level Joint Steering Committee held in Mount Abu, Rajasthan, India on Saturday. Various other important agreements on international power trade including expanding the power of existing, under-construction and proposed transmission lines were reached during the meeting. Joint Secretary of the Ministry of Energy, Water Resources and Irrigation, Madhu Prasad Bhetwal, who participated in the meeting, shared that an agreement was reached to increase the capacity of import-export electricity through Dhalkebar-Muzaffarpur 400 KV transmission line by 200 MW. Similarly, an agreement has been reached between the two sides to import and export 70 to 80 megawatts of electricity from Tanakpur-Mahendranagar 132 KV power transmission. A joint technical team will study possible options for exporting up to 200 megawatts of electricity as well. "India has responded positively to Nepal's proposal to enter into an intergovernmental agreement to export electricity generated from various hydropower projects in Nepal to the Indian market, also including a specific proposal to export 50 megawatts of electricity from Nepal to Bangladesh," said Joint Secretary Bhetwal. It has also been agreed to set up necessary mechanisms to export power from Nepal to the Indian state of Bihar during the rainy season through the existing 132 KV transmission line. Both the parties agreed on the early completion of the construction work of the Indian section of the 400 KV new Butwal-Gorakhpur transmission line as the second international transmission line by March 2025. According to Joint Secretary Bhetwal, it has also been agreed to build two more 400 KV capacity international transmission lines between Nepal and India, including Inaruwa-Poornia transmission line by 2027/28 and New Lamki-Bareli transmission line by 2028/29.  

The Independent Power Producers' Association, Nepal (IPPAN) has announced the Power Summit 2023, the biggest event in Nepal dedicated to power. According to IPPAN, the eighth edition of Power Summit will be held on March 28-29 in Kathmandu with the theme "Broadening Green Energy Markets". According to IPPAN, power projects totaling 5,000 MW will be showcased from the Project Bank of Investment Board Nepal and the private sector during the summit. "The investors will have an opportunity to discuss and understand power projects for investments," said IPPAN in a press statement. IPPAN has stated that Nepal has now entered into an era of self-reliance in electricity generation and heading towards being an energy-surplus nation. With the recent addition of the 86MW Solu Dudhkoshi Hydropower project to the national grid, the installed capacity has reached 2520 MW. An additional 600MW capacity shall be added in 2023 with the total installed capacity of power projects reaching 6,700 MW by 2027. The private sector contribution is expected to reach 80 percent of installed capacity from the present 55 percent. According to IPPAN, with the sluggish peak demand at 1,700MW, the current year's wet season surplus is expected to reach 1,000MW, and the time has come for Nepal to seriously explore the market for the energy. With Nepal making improvements on the supply side of green energy, IPPAN has said it is  high time to focus on the demand side. "We are now ready to 'broaden green energy markets' first at home, and then in the region," reads the statement, adding, "Demand will dictate the way we manage the supply side of green energy." Broadening the green energy markets, according to the IPPAN means enabling transportation, agriculture, industry, cooking, and commerce to both grow rapidly and make a complete switch to green energy away from fossil fuels which Nepal has to import at a huge cost to the economy. "The discussions during the summit are expected to pave the way for identifying and opening doors for markets for Nepal’s green energy," said IPPAN.  The summit aims to provide a forum for discussion, discourse, and debate by all key experts of the power sector. The summit will have 13 sessions to cover issues ranging from markets for Nepal’s power, transmission infrastructure, demand for Nepal’s hydropower, technology and innovation, thinking beyond hydropower to solar, hydrogen, regulatory framework, cross-border power trade, sustainable and climate-resilient development, environment social and governance, regionals interest and energy security. IPPAN expects there will be 800 participants from all across the power sector including 300 international delegates from more than 30 countries.

At a time when the resource crunch has affected the development activities in the country, the government has targeted to receive Rs 65.65 billion in budgetary support in the current fiscal year 2022/23 to use in the priority sectors. According to the mid-term review of the budget 2022/23, the government has aimed to receive the amount from major development partners including the World Bank Asian Development Bank, International Monetary Fund, and the European Union. It will be around 31 percent of the total foreign aid expected to be received in the current fiscal year. In the mid-term review of the budget, the government has lowered the target for foreign grants and loans to Rs 209 billion from the initial target of Rs 297.71 billion. The government has prioritized receiving foreign aid in the form of budget support which Nepal can utilize in its priority areas. The government’s International Development Cooperation Policy (DPC)-2019 has highlighted that budget support is the country’s most preferred official development assistance modality. “This is because budget support inherently ensures coherence with the principle of country ownership. It is predictable, allows for better development planning, lowers fragmentation, and leads to more effective use of pooled resources,” states the Finance Ministry in the Development Cooperation Report 2020-21. According to the ministry, budgetary support allows for greater responsiveness to development needs, reduces transaction costs associated with managing various implementation channels, and helps build government capacity, contributing to more sustainable results. However, most of the foreign aid is being received in the form of project support. However, multilateral donors have increasingly been supportive to provide aid in the form of budgetary support in recent years. In the mid-term review of the budget, the finance ministry has stated that the government has already received Rs 15 billion in budgetary support while the rest will be received in the due course as they are in different phases of completion. According to the ministry, development policy credit (DPC) worth Rs 12 billion has been received from the World Bank for Green, Resilient, and Inclusive Development (GRID). In August last year, the two sides signed a the concessional financing agreement of USD 100 million (equivalent to Rs. 12.7 billion) for the GRID. The proposed budgetary support aims to support improvements in the enabling environment in Nepal toward green, climate-resilient, and inclusive development. This is the first in a programmatic series of three concessional loans on GRID, according to the World Bank. Likewise, the ministry said that the government also received Rs 3 billion from the Asian Development Bank under its policy-based lending heading which is also budgetary support. Preparation is underway to receive DPC worth Rs 12 billion under Finance for Growth from the World Bank by the end of the current fiscal year, according to the ministry. The government of Nepal and the World Bank signed a $150 million ‘Finance for Growth’ Development Policy Credit (DPC) in May last year to strengthen financial sector stability, diversify financial solutions, and increase access to financial services in Nepal. The ministry also said that preparation is also ongoing to receive an additional DPC (Fiscal) worth Rs 12 billion by the end of the current fiscal year, according to the ministry. Extra funding of Rs 1.49 billion will also be received this fiscal under program-based result financing from the World Bank. “Preparation is being made to sign a concessional financing agreement for program-based result financing,” the ministry said. Likewise, the government said it aims to receive a total of Rs 22.5 billion as budgetary support in the current fiscal year of which Rs 3 billion has already been received. As much as Rs 13 billion will be received under Strengthening Public Financial Management and Devolved Service Delivery Program while Rs 6.5 billion will be received under SASEC Customs and Logistic Reform Program. The government expects Rs 6.6 billion under the extended credit facility (ECF) of the International Monetary Fund (IMF). The amount is expected to be received in February. In early 2022, the IMF approved ECF worth SDR 282.42 million (about USD 395.9 million) and it will provide the funding on an installment basis. The 38-month financing package will help mitigate the pandemic’s impact on health and economic activity and protect vulnerable groups; preserve macroeconomic and financial stability; and support a reform agenda that leads to sustained growth and poverty reduction, the IMF said. Likewise, the government aims to receive budgetary support of Rs 1.56 billion from the European Union (EU) under the EU Contribution to Agriculture and Rural Development (CARD) Program. The government has been encouraging donors to pour money aid under budgetary support for a long time. Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel last month asked the World Bank to increase its aid to Nepal in the form of budget support. Such a request was made during his meeting with the World Bank’s Country Director for Nepal Faris Hadad-Zervos on January 19. As Nepal seeks more resources to fulfill its financing needs, the share of budgetary support has increased in the past decade. According to the Development Cooperation Report 2020/21, the share of budget support stood at 30.27 percent of the total disbursed official development assistance in FY 2020/21. As much as USD 509.99 million was disbursed as budget support in that fiscal year. In FY 2019/20, the share of budget support was 36.52 percent. In the earlier years, the share of the budget support was lower with 15 percent being disturbed as budget support in FY 2018/19, according to the Development Cooperation Report 2018-19. Budgetary support by donors in this fiscal year

The price of gold has dropped by Rs 500 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 102, 500 per tola today. The yellow metal was traded at Rs 103, 300 per tola on Thursday. Meanwhile, tejabi gold is being traded at Rs 102, 000 per tola. It was traded at Rs 102, 500 per tola. Similarly, the price of silver has dropped by Rs 10 and is being traded at Rs 1,275 per tola today.