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KATHMANDU: Nepal Prime Minister Pushpa Kamal Dahal “Prachanda” on Wednesday said that India has reservations over buying energy from the Himalayan nation produced by Chinese contractors.
Addressing a parliamentary committee meeting, he said though everyone is free to invest and produce energy in Nepal but as per long-term energy trade with India, New Delhi has reservations over buying energy produced by the Chinese companies/contractors.
During External Affairs Minister S. Jaishankar's visit to Nepal last week, the two neighbouring nations had signed an agreement on long-term power trade paving way for Kathmandu to export 10,000 megawatts of energy to New Delhi.
The agreement is valid for 25 years and subject to renewal every 10 years.
"India has reservations over energy produced directly by Chinese government companies... The Chinese have asked us to tell India that it's not Chinese government owned companies but they were selected through the global competitive bidding process.
"As per India's cross border energy trading guidelines, it will only buy electricity from Nepal produced only by the Indian or Nepali companies and investment," Prachanda said.
He further said that in the agreement with India, there is no mention of buying energy only produced by Indian companies.
"We have requested India to consider to buy energy produced through the competitive bidding process whoever produces."
As Nepal focusses on hydropower development to meet its own energy needs and export the surplus to neighbouring countries, a fresh study has identified that the Himalayan nation has the potential to harness over 72,000MW of hydropower across 10 major river basins and their sub-basins.
Nepal’s rich water resources were long known, as the country has approximately 6,000 rivers with a total length of 45,000 km.
The average annual water runoff from these rivers is about 220 billion cubic metres, according to an Asian Development Bank.
The 25-year long-term agreement was initiated when Dahal visited India from May 31 to June 3, 2023.
In New Delhi, Prime Minister Narendra Modi had announced during a joint press meet with Dahal that the neighbour would buy 10,000 MW of electricity in 10 years from Nepal under the long-term power trade agreement.
“Under this agreement, we have set a target of importing 10,000 MW electricity from Nepal in the coming 10 years,” Modi had said at the time.
Besides exporting power to India, there is a sharp increase in Indian investment in Nepal’s energy sector.
India’s SJVN Limited, which is developing the 900 MW Arun-3 Hydropower Project, has also been granted a license to develop the 669 MW Lower Arun Hydropower Project and the 490 MW Arun-4.
Arun-4 will be developed as a joint venture by the NEA and SJVN, which will have a majority stake.
Likewise, India’s NHPC Limited is also set to develop the 750 MW West Seti and the 450 MW Seti River-6 project.
Similarly, NHPC Limited and Vidyut Utpadan Company Limited signed a Memorandum of Understanding to jointly develop the 480 MW Phukot Karnali Project during Dahal’s India visit.
Indian firm GMR is also making efforts to develop the 900 MW Upper Karnali Hydropower Project.
"India is ready to take energy from Nepal but it has reservations over energy produced by the Chinese companies," Prachanda said at the meeting.
"If energy produced by the Chinese companies through the global competitive bidding process, we have asked the Indian side not to understand it as produced by the Chinese companies or Chinese government."