The Union Ministry of Power of India has amended the guidelines for transnational power trade. It will be easier to sell Nepali electricity to India after the new guidelines came into effect on December 18.
The earlier guidelines issued in November 2016 had set double conditions to sell electricity from Nepal. It required Indian investment of at least 51 percent or full investment of Nepal government in the generating project for selling electricity to India. It similarly required that any company involved in power trading must have Indian share investment of 51 percent.
The Energy Ministry had written to India demanding amendment to the guidelines immediately after it came into effect stating that it was against the spirit of power trade between the two countries.
India has amended the guidelines two years later removing the conditions about investment in the generating projects and power trading companies.
"Indian entities may import electricity from the generation projects located in neighboring country(ies) directly or through Government or a Government Company or a licensed trader of that country after taking approval of the Designated Authority; provided that the generation project(s) has the permission to export power to India from the respective Government of the neighboring country," the new guidelines reads. "In case of import through bilateral agreement between two countries, the Government of India may designate an Entity for import of power."
Managing Director of the Nepal Electricity Authority (NEA) Kul Man Ghising said the new guidelines have incorporated many demands of Nepal and called it progressive. "Nepal had urged India to remove many provisions through the letter," Ghising stated. "The guidelines has now been amended. The Indian market is now open for electricity generated by projects with investment of any country."
He pointed that the amended guidelines will make it easier to sell Nepali electricity to even Bangladesh.
India has brought the new guidelines targeting Bangladesh, Bhutan and Nepal with which India currently is trading power. But this will not affect other two countries as Bangladesh, which is currently importing 500 MW, does not have potential to export electricity to India any time soon in the future, while Bhutan has already been selling electricity to India as per the provisions in the guidelines.
Article 4(b) of the power trade agreement signed between Nepal and India on October 21, 2014 mentions that the two countries will give permission to any official/licensed power producer/buyer/trader to seek access for cross-border transmission lines for transnational power trade in accordance to the laws of the respective countries.
Power demand in India is projected to rise by 239000 MW by 2022. Nepal is expected to have surplus energy of around 5000 MW by then.
