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Power Purchase and Sell Among Countries
Power Purchase and Sell Among Countries
Siddhi B Ranjitkar
December 25, 2018
Kathmandu
India paved the way for buying the energy from Nepal deleting the provision such as “India would buy the power produced by the plant made with the minimum 51 percent of the Indian investment” from the Inter Countries Power Trade Directive issued on December 5, 2016. India has made public the amendment made to the directive on Tuesday, December 18, 2018.
Even in 1990, an Australian company wanted to invest in the hydropower project in Nepal, and had approached the Indian authorities to buy the power. However, Indian authorities refused to buy the power even though India had suffered from the acute short supply of power because foreign companies were going to build power plants in Nepal.
Ultimately, India had issued Inter Countries Power Trade Directive in 2016 restricting to the power purchase from the power plants that would be built with the minimum 51 percent Indian investment. That was the initial opening of the Indian power market to Nepal and other countries around.
Immediately after the publication of the Inter Countries Power Trade Directive, Nepalese power authorities have approached the Indian authorities to relax the provision made in the directive. The authorities studied the directive seriously and minutely and then sent the feedback through the Indian embassy in Kathmandu. It really did work to relax the restrictive conditions made for purchasing the power from Nepal.
However, the amended directive has many technical and other provisions made for purchasing power from Nepal. Nepal needs to study them and again needs to send the feedback to the Indian authorities to take the advantage of the infinite Indian power market, according to the joint secretary to the Minister of Energy that spoke to the anchor of the Radio Nepal morning program called ‘antar sambad” on December 25, 2018.
One of the provisions made in the directive is that the power purchase would be following the bilateral agreement between the countries, and the understanding the concerned companies of the countries have reached.
India will set up an authority for giving an approval of power purchase. Such an authority will be made responsible for coordinating the management and supervision of transmission lines, and the security of grid with the concerned countries. Companies of both countries purchasing and selling power have to take an approval of the authority.
After the amendment to the directive, Nepal could sell its power to the third country such as Bangladesh passing through the Indian Territory. Bangladesh and Nepal are separated by only 27-kilometer stretch of the Indian Territory. Nepal and Bangladesh have already held talks about the sell and purchase of power between the two countries.
(Source: the news in “artha bazaar”: supplement to “gorkhapatra” of December 24, 2018)
