Nepal and India sign 25-year long-term energy trade agreement

KATHMANDU: In a historic development, Nepal and India have inked a long-term energy trade agreement spanning 25 years, with provisions to export 10,000 megawatts of electricity from Nepal to India within a decade.

The agreement, reached during the official visit of Indian Foreign Minister Dr. S Jaishankar to Nepal, solidifies the two countries’ commitment to robust and sustained energy cooperation.

After the joint meeting of the Foreign Ministers of Nepal and India in Singhdurbar, it has been announced by the Ministry of Energy that the signed agreement will be made public.

The bilateral agreement, signed by the Energy Secretary of Nepal, Gopal Sigdel, and India’s Energy Secretary, Pankaj Aggarwal, is a pivotal step in fostering comprehensive energy collaboration.

The agreement opens the door for both nations’ power trading companies to engage in medium and long-term electricity purchase and sale agreements (PPAs). To facilitate this, both governments will issue necessary directives, guidelines, procedures, and notifications.

This agreement comes after India granted permission for Nepal to sell 632 megawatts of electricity in its market. India, however, restricts the export of electricity generated from projects with Chinese and Pakistani involvement.

The visit of Indian Foreign Minister Jaishankar also marks the inauguration of three cross-border transmission lines with a 132 KV capacity, enhancing the power exchange capabilities between the two nations. In addition to the agreement signing, the visit will witness the joint inauguration of three cross-border transmission lines—Raxaul-Parwanipur, Kushah-Kataiya, and New Nautuna-Manaiyan, all with a capacity of 132 KV.

These transmission lines are crucial for the import and export of power between Nepal and India, fostering greater energy cooperation between the neighboring nations.