NEPAL-INDIA JSC MEET Power Trade Breakthrough

A delegation led by Dinesh Kumar Ghimire, secretary at the Ministry of Energy, Water Resources and Irrigation, has achieved a significant breakthrough in the Nepal, India Power Trade

Feb. 19, 2023, 7:01 p.m.

As a recent bilateral foreign secretary level meeting between Nepal and India ended on favorable terms, the 10th Joint Steering Committee Committee (JSC), held in Mount Abu in Rajesthan, was an ideal opportunity for secretary Ghimire to make significant progress on Nepal-India bilateral trade and cooperation in the power sector.

Nepalese Foreign Secrtary Bharat Raj Paudyal and Indian foreign secretary Vinay Mohan Kwatra in their recent bilateral level meetings agreed to resolve the issues in power trade.

Secretary Ghimire is an experienced negotiator who has taken part in numerous bilateral power trade talks with India. The meeting began on February 18 and 19 in Mount Abu. Alok Kumar, Secretary (Power), Government of India, and Dinesh Kumar Ghimire, Secretary (Energy), Ministry of Energy, Water Resources, and Irrigation, Government of Nepal, co-chaired the apex JSC meeting.

Similarly, Dr. Shanker Prasad Sharma, Nepal's ambassador to India, has also worked tirelessly to break down barriers in Nepal-India trade, including in the power sector. His meeting with India's power ministry prior to the JSC meeting also aided the Nepalese side in making progress.

Finally, Ghimire, who missed the 10th JSC meeting, was able to persuade India to allow Nepalese electricity export to Bangladesh via India's transmission grid. In a report prepared by the Joint Working Group (JWG) on the power sector, India expressed its willingness to allow 50 MW of Nepalese electricity to be exported to Bangladesh via India.

The two sides reaffirmed that power sector cooperation is a strong pillar of the Nepal-India partnership and agreed to pursue it along the following axes: joint development of generation projects in Nepal, joint development of cross-border power transmission infrastructure, power trade under respective domestic regulations and policy frameworks, and capacity building assistance.

The Nepali side thanked India for their warm welcome and hospitality in Mount Abu, and the 10th meeting of India-Nepal JSC, JWG on power sector cooperation concluded with success.

The Nepali side updated the Indian side on recent developments and future trends in Nepal's power generation, transmission, and demand scenarios. The Indian side also acknowledged Nepal's recent increase in installed power generation capacity, which paves the way for stronger and mutually beneficial power sector cooperation.

The two parties also agreed to form a Joint Hydro Development Committee (JHDC) to further investigate the development of viable hydropower projects in Nepal, with a particular emphasis on storage projects.

Secretary Ghimire uses all of his skills to make a major breakthrough in the Nepal-India electricity trade at the 10th Secretary Level Joint Steering Meeting.

With the Managing Director of Nepal Electricity Authority, Kul Man Ghising, in his delegation, Secretary Ghimire has an added advantage in using his power trading skills. MD Ghising, who has been dealing with the Indian power sector for many years, is very familiar with Nepal's demand and supply situation, as well as the area in Nepal, India power trade.

“This meeting is a major milestone in Nepal, India power trade. We have made many progress to enhance Nepal-India power trade particularly Nepal’s export to India,” said MD Ghising.

At a time when the national grid is receiving over 800 MW of surplus electricity from the upcoming monsoon, the agreement to add 200 MW capacity to the 400 kV Dhalkhebar-Muzaffarpur cross-border transmission line is extremely significant.

According to a Ministry press release, Nepal and India have reached an agreement to increase power import and export capacity from 600 to 800 MW via the first international Dhalkebar-Muzaffarpur 400 KV transmission line.

Madhu Prasad Bhetwal, Joint Secretary of the Ministry of Energy, Water Resources, and Irrigation, who attended the JWG, stated that an agreement was reached to increase the capacity of import-export electricity through the Dhalkebar-Muzaffarpur 400 kV transmission line by 200 MW.

He also stated that the two parties had reached an agreement to import and export 70 to 80 megawatts of electricity from the Tanakpur-Mahendranagar 132 kV transmission line. A joint technical team will also investigate potential options for exporting up to 200 megawatts of electricity. This was agreed upon at the Energy Secretary-level Joint Steering Committee meeting on Saturday in Mount Abu, Rajasthan, India (18 February).

Several other important agreements on power trade were reached during the meeting, including expanding the power of existing, under-construction, and proposed transmission lines.

"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, including a specific proposal to export 50 megawatts of electricity from Nepal to Bangladesh," Bhetwal said.

It was also agreed at the meeting to set up the necessary mechanisms to export power from Nepal to the Indian state of Bihar during the rainy season via the existing 132 kV transmission line.

Both parties agreed that the Indian section of the 400 kV new Butwal-Gorakhpur cross-border transmission lines, which will serve as the second international transmission line, should be completed by March 2025.

Nepal and India have also agreed to construct two more 400 kV cross-border transmission lines, including the Inaruwa-Poornia transmission line by 2027/28 and the New Lamki-Bareli transmission line by 2028/29.

The authorities focused their discussions on joint development of generation projects in Nepal, cross-border power transmission infrastructure development, power trade under respective domestic regulations and policy frameworks, and capacity building assistance.

This was the first meeting between Nepal and India at the level of energy secretary since the formation of the Prachanda-led new government in December last year. Regardless of the change of guard in Kathmandu, Nepal-India power sector cooperation is expected to proceed smoothly.

Prime Minister Prachanda's first visit to India, which is still being worked out diplomatically, is expected to boost bilateral cooperation in the power sector.

During their meeting, the Indian side expressed interest in signing an inter-governmental agreement to export electricity generated by hydroelectric projects in Nepal to the Indian market.

The Indian side also responded positively to Nepal's request to export excess energy to Bangladesh through India. "India will facilitate the export of 50 megawatts of electricity from Nepal to Bangladesh. "Nepal will send a specific proposal to India in the near future," Bhetuwal added.

To deepen cooperation in the power sector, the two neighbors issued a long-term vision titled "India-Nepal Joint Vision Statement on Power Sector Cooperation" during former Prime Minister Deuba's official visit to India in April 2022.

During the visit, Nepal invited Indian companies to invest in the development, construction, and operation of viable renewable power projects, including those in Nepal's hydropower sector, with a particular emphasis on storage-type projects.

According to Ghising, who attended the meeting, India, among other things, views Nepalese proposals to allow Nepalese electricity export to Bangladesh favorably, and has requested that Nepal provide the name and details of the project for this trade. India agrees to consider export after NEA inspections to ensure compliance with cross-border directives. This is a very encouraging development.

MD ghising.jpg

He also stated that India has agreed to extend Nepalese electricity trade under the day-ahead competitive market of Indian Energy Exchange Limited (IX). Following the examination and review, India agreed to extend the agreement for another year, adding additional hydropower projects. He also stated that the Indian side had informed Nepal of its proposal to enter the real-time market. MD Ghisng said that India has been supportive of Nepal's proposal for a long time.

He also acknowledged that India has agreed to allow a 132 kV single circuit Tanakpur-Mahendranagar transmission line for Nepalese electricity exports. The transmission line will be allowed to evacuate 70 MW of electricity from April to July and 80 MW from July to March, according to the agreement.

MD Ghising stated that this agreement allows for the export of surplus electricity generated in Sudur Pashicm's various districts. He also stated that India agreed to consider Nepal's proposal to export Nepalese electricity to India via 132 kV and a subsequent low capacity transmission line. However, because such transition and transmission charges fall under the purview of the interstate system, it must consult the issue states.

Ghising also mentioned that India has agreed to support Nepal's solar power system and green hydrology.]

After wasting decades debating water resources, Nepal and India have recently made significant progress. The breakthrough made by Secretary Ghimire's team gives Nepal more space, potentially opening up a larger Indian market.

India Electricity trade aims to demonstrate to Nepalese citizens that India is a market for Nepalese electricity, with MD Ghising holding the opinion that this is yet another significant milestone in Nepal.

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