India endorses MoU to purchase 10,000 MW power from Nepal in ten years

India has endorsed a memorandum of understanding (MoU) to purchase electricity from Nepal.

Under this agreement, India has agreed to import 10,000 megawatts (MW) of electricity from Nepal in the next ten years.

According to Nepal's ambassador to India, Dr Shankar Prasad Sharma, the federal Council of Ministers of India formally endorsed the agreement on the power trade with Nepal and India shared information about this through social media X (twitter).

He said the decision would contribute to accelerating Nepal's economic development and restructuring efforts.

The MoU was initially signed between the two countries during Prime Minister Pushpa Kamal Dahal's latest visit to India (May 31-June 3, 2023) and at the time the Prime Minister termed the moment historic. Energy secretaries from both countries signed and exchanged the document.

Following India's latest decision to endorse the agreement, the energy secretaries from both neighboring countries will participate in a special ceremony to formally resign it.

Joint Secretary at the Ministry of Energy, Hydro Resources and Irrigation and Spokesperson for the Ministry, Madhu Prasad Bhetuwal said they were unofficially informed about the official decision of the Indian government to endorse the agreement and expect to receive an official confirmation regarding the decision.

With the decision, the door to export the electricity produced in the Indian market in an easy and smooth manner has been opened.

Nepal had been urging for power export in the Indian market in short-term, mid-term and long-term. 

The Nepal Electricity Authority (NEA) has been exporting 452 megawatt electricity in the Indian Energy market on a daily basis. 

Nepal and India had signed a power trade agreement in 2014. The Indian Company, Satluj Jal Vidyut Nigam, is constructing a 900-megawatt Arun III hydropower project. Although the Indian company, GandhI Mallikarjun Rao, has been said to construct a 900-megawatt Upper Karnali hydropower project, it has not been started yet.

Similarly, Indian companies have forwarded necessary processes for the construction of different projects including Lower Arun, West Seti and SR-6.

An agreement has been reached between Nepal and India to construct some projects after preparing joint investment.

Nepal has been making preparations to export 40-megawatt electricity in Bangladesh soon.

The private sector has been demanding the government to grant permission for power trade. The proposed new electricity bill has made this arrangement.

The Cabinet meeting held on August 29 had given permission to the Energy Ministry to table the electricity bill in the Federal Parliament.