Editorial: A landmark energy deal

Nepal and India on Thursday signed a landmark agreement on bilateral energy cooperation, allowing seamless export of Nepal’s energy to the Indian market. As per the agreement, India will purchase up to 10,000 MW electricity in the next 10 years. 

The agreement is a game-changer for Nepal’s hydropower projects because it has ensured market access for Nepal’s electricity. Earlier, international investors were reluctant to invest in Nepal’s hydropower sector due to skepticism regarding market access. 

Similarly, India, Nepal and Bangladesh are working to sign a trilateral energy cooperation which paves the way for Nepal to sell electricity in Bangladesh. The energy-hungry South Asian country is struggling to fulfill its electricity demand. It has reached out to neighboring countries including Nepal with the proposition of importing electricity. 

The agreement makes way for the Indian as well as international investors to invest in Nepal’s hydropower sector. Still, there are concerns over the electricity produced by the Chinese companies. India has refused to purchase electricity produced by Chinese companies or from projects with Chinese components.

The government needs to create a conducive environment for hydropower companies to speed up the construction of projects. 

Hydropower investors often complain of local governments and residents obstructing work at project sites under various pretexts and demands. The federal government should take immediate measures to resolve the problems facing private companies. 

There is a long-list of demands from private investors which should be resolved without any delay. Hydropower is one of the biggest assets of Nepal. The government and its concerned agencies should be serious about dealing with bureaucratic and other hurdles that have been crippling this sector. 

At the same time, India should seriously consider the issues that Nepal has been raising concerning the electricity trade between the two countries.