In a move helping Nepal in its electricity export, India for the first time gave its nod for the tripartite arrangement in cross-border trading of electricity, allowing Nepal to share its electricity to Bangladesh through Indian transmission lines.
Along with the new guidelines on cross-border trading of electricity, the Indian Government added a new provision allowing power trade between any two countries using Indian power lines upon an agreement with the Indian Government’s Central Transmission Utility.
“Where tripartite agreement is signed for transaction across India, the participating entities shall sign a transmission agreement with the Central Transmission Utility of India to obtain transmission corridor access,” say the newly-issued Guidelines on Cross Border Trade Import/Export of Electricity.
Indian Government had failed to recognize the trilateral agreement while issuing guidelines on cross-border electricity trade for the first time in 2017.
Experts feel that the new guidelines replacing the old ones issued in 2017 will provide an opportunity for Bangladesh and Nepal to enjoy power trading through Indian territory.
“This will foster power trade between Nepal and Bangladesh, giving opportunity to the former to export surplus electricity that it is on the track to generate within a few years,” says Semana Dahal, a lawyer and also an advisor to the Government of Nepal on infrastructure projects.
Responding on India’s move, Nepal Energy Ministry Minister said that the new decision would also give due boost to Nepal’s hydropower sector.
“The new guidelines were introduced along with the spirit of the Power Trade Agreement (PTA) signed between Nepal and India in 2014 which requires both countries to allow non-discriminatory access to cross-border electricity market,” says Dinesh Kumar Ghimire, Joint Secretary at the Energy Ministry.
The Indian Government also removed older guidelines that allow India Government-owned Nepali-based hydropower projects (or those with majority Indian share) to export power only to India.
And, other companies open to selling power to India were mandated to receive approval of the designated authority on a case-by-case basis.
That move discouraged foreign investors and electricity exporting firms of Nepal keen on building export-oriented hydropower projects targeting the Indian market.
“The approval for export could be refused if the designated authority is not satisfied with equity ownership or Indian government does not concur as per the new guidelines. This leaves some room for discretion,” says Dahal.
Dahal argues that the guidelines lack precision and most of the matters in them will further need clarification in the regulations to be issued by the Central Electricity Authority (CEA) or Central Electricity Regulatory Commission (CERC) of India.
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