Strict Rules Concern Indo-Nepal Power Trade

July 6, 2017

Nepal’s move to export electricity to India takes a hit as the latter country issues strict regulations over the cross-border power trade with its neighbors.

In line with the uniform regulation passed by the Indian Power Ministry to Nepal, Bhutan and Myanmar on cross-border power exchange, the Central Regulatory Commission of the three countries issued a regulation seeking INR 10 million as a bank guarantee to utilize Indian transmission network. The regulation also noted that the hydropower projects with 50 MW and above capacity will only be granted grid connectivity to export.

As per the Indian regulation, companies (of the respective countries) wishing to export to the Indian market should have 51% equity investment of the Indian public and private companies, and can export only after a one-time approval from the concerned Indian authorities.

Commenting on these regulations, the Nepali power developers say the regulation has strict rules for the private sector projects. The Energy Ministry has already forwarded its concerns to the Indian counterparts, as the guidelines are against the Power Transfer Agreement (PTA) signed between the countries in 2014.

Shailendra Guragain, president of Independent Power Producers’ Association, said that all the neighboring countries covered under the uniform regulation need to lobby together to gain access to the Indian market.