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Nepal and Indian authorities have signed an agreement with the goal of achieving 10,000 megawatts of electricity export to India over the next ten years.
Indian hydropower projects in Nepal
• West Seti and Seti River (SR6) Projects (1,200 MW),
• Sapta Kosi High Dam project on the Kosi river,
• Mahakali Treaty (6,480 MW), the Upper Karnali Project(900 MW), and the Arun-III projects(900 MW),
• Phukot Karnali Hydroelectric Project
o Through contracts between NHPC and VUCL (Vidyut Utpadan Company Ltd), Nepal.
• Lower Arun Hydroelectric Project
o Through a contract signed between SJVN (India) and the Investment Board of Nepal.
| Significance of cooperation for India | Significance of cooperation for Nepal |
| Bilateral cooperation: Hydro-power cooperation is a solid pillar in India-Nepal relations. Energy demand: Nepal’s enormous water wealth and huge hydropower potential can cater to India’s increasing energy requirement. China Factor: It will help India minimise the geopolitical influence of China and firm India’s presence in Nepal. | Technological Expertise: Collaboration with India provides access to technological expertise and experience in the construction and management of hydropower projects. Infrastructure Development: Investments from India can help build the necessary infrastructure in Nepal. Export Revenue: Exporting surplus electricity to India can become a source of revenue for Nepal. |
Key development issues in hydropower
• Natural limitations: Fragile geology and poor hydrological data, high sediment load in rivers in Nepal, and glacial silt.
• Poor Infrastructure: Poor access roads to site and transmission grid for power evacuation makes the projects unattractive.
• Chinese issue: India does not want to buy power generated from hydropower projects in Nepal developed by Chinese companies.
• Lack of policy and regulatory framework for third party access to the grid.
• Water sharing problems: Downstream water use and flood control issues etc., also arise with larger multipurpose projects.
Next Steps
• Resilient and effective infrastructure: Helping Nepal develop its transmission infrastructure within the country and the interconnections to India.
• Hydropower as a multiplier: Both sides should view hydropower development in Nepal as a means to enable long-term cooperation and stability in the region.
• Coverage beyond: Projects can, and could, extend to other regional partners under a Bangladesh-Bhutan-India-Nepal (BBIN) framework for cross border energy cooperation.
