Nepal, India agree to develop hydropower projects in Nepal

Nepal and India have agreed to develop large hydropower projects in Nepal through joint investments, the Ministry of Energy, Water Resources and Irrigation said on Thursday.

During a secretary-level joint steering committee meeting, the two sides agreed to set up a joint technical team to work on the plan, the ministry said in a press statement.

"We're still in the early stage of discussion on developing large hydropower projects through joint investments," Chiranjeevi Chataut, joint secretary at the ministry said.

According to him, no project has been identified for joint investments.

Indian companies are currently involved in some large hydropower projects in Nepal, including the 900 megawatts (MW) Arun-III Hydropower Project in eastern Nepal and the 900MW Upper Karnali Hydropower Project in western Nepal.

According to the Nepali ministry, the two sides also agreed that the Nepal Electricity Authority and the Power Grid Corporation of India would set up a joint venture by April to construct a 400 kilovolts (KV) new Butwal-Gorakhpur transmission line on the Indian side.

Nepal will construct part of the proposed transmission line on its side, as the two countries agreed to jointly fund a 140-km-long transmission line on the Indian side in September last year.

Currently, power trade between Nepal and India is conducted through the Dhalkebar-Muzaffarpur cross-border transmission line in eastern Nepal, which has a capacity of 400KV.

Nepal aims to export its surplus electricity to Indian markets, during the monsoon in particular. In November last year, India allowed Nepal to export 39MW of electricity to the country through its energy exchange market.

India has also agreed to allow Nepal to export more electricity to India in the upcoming monsoon season, according to the Nepali ministry.

In addition, Nepal and India have agreed to conduct a feasibility study on the construction of a cross-border transmission line between Nepal and India's West Bengal State, and such a transmission line may work as a transit for power trading between Nepal and Bangladesh, said Chataut.