Context:
India and Nepal recently signed two major agreements to boost energy cooperation and develop high-capacity cross-border power transmission lines. The agreements were signed between India's POWERGRID Corporation and the Nepal Electricity Authority (NEA) to establish new transmission corridors and facilitate increased electricity trade.
Key Features of the Agreements:
Projects covered
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- A 400 kV double‐circuit (Quad Moose) line from Inaruwa (Nepal) → New Purnea (India).
- A 400 kV double‐circuit (Quad Moose) line from Lamki (Dodhara) (Nepal) → Bareilly (India).
- A 400 kV double‐circuit (Quad Moose) line from Inaruwa (Nepal) → New Purnea (India).
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Joint Venture (JV) structure
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- Two separate JV companies will be incorporated: one in India (for the Indian portion) and one in Nepal (for the Nepal portion).
- For the Indian‐territory JV: POWERGRID to hold 51%, and NEA 49%.
- For the Nepal‐territory JV: NEA to hold 51% and POWERGRID 49%.
- Two separate JV companies will be incorporated: one in India (for the Indian portion) and one in Nepal (for the Nepal portion).
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Significance:
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- Economic: Increased electricity trade can generate revenue for Nepal and help India meet power requirements, reducing dependence on fossil fuels.
- Energy Security: Cross-border interconnections diversify energy sources and strengthen grid stability for both nations.
- Regional Cooperation: The agreements align with India’s vision of a regional energy market in South Asia, promoting shared prosperity and sustainable development.
- Economic: Increased electricity trade can generate revenue for Nepal and help India meet power requirements, reducing dependence on fossil fuels.
Challenges & Considerations:
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- Infrastructure development in hilly and remote regions poses logistical and financial challenges.
- Coordination on pricing, transmission losses, and regulatory frameworks is crucial for long-term sustainability.
- Environmental and social impacts of transmission corridors and hydropower projects must be carefully managed.
- Infrastructure development in hilly and remote regions poses logistical and financial challenges.
About India and Nepal's energy cooperation:
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- India and Nepal's energy cooperation is a strategic pillar focusing on hydropower development, with a recent long-term agreement for Nepal to export 10,000 MW of electricity to India over the next decade.
- Key initiatives include joint projects like the Arun-3 and Phukot Karnali hydropower projects and agreements to build new cross-border transmission lines to facilitate power trade.
- This partnership benefits both countries by addressing India's energy needs and providing Nepal with revenue and technological expertise.
- India and Nepal's energy cooperation is a strategic pillar focusing on hydropower development, with a recent long-term agreement for Nepal to export 10,000 MW of electricity to India over the next decade.
Conclusion:
The recent agreements between India and Nepal mark a significant step in bilateral energy cooperation. By improving cross-border transmission capacity and facilitating electricity trade, both countries can achieve economic growth, energy security, and regional integration, reflecting a model of mutually beneficial collaboration in South Asia.
