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India eases power generation process in Nepal

By Our Reporter
The Indian government that had issued a directive restricting the import of power generated in Nepal by the companies other than the Indian ones has finally lifted the restriction, paving the way for Nepal to export power to the third countries. Besides, India agreed to open power banks with Nepal.
The controversial provision had discouraged foreign investment in power sector in Nepal.
Nepal and India recently agreed to ink the much awaited ‘energy banking’ deal, which will ensure uninterrupted exchange of power between the two countries.
During the 13th meeting of the Power Exchange Committee (PEC) held in New Delhi, India last week, authorities of the two countries agreed to seal the Nepal-India energy banking deal. The draft of this agreement is expected to be approved by the energy secretary-level joint steering committee meeting this month.
Nepal had long been demanding the energy banking deal with India in a bid to ensure that the country could export its surplus electricity to India and import power from the southern neighbour when necessary. The energy banking mechanism allows Nepal to export power to India amid surplus generation and import the same amount of power when necessary.
Following the agreement at this level, Kulman Ghising, managing director of Nepal Electricity Authority (NEA) and the leader of Nepal’s delegation at the PEC meeting, said that energy banking agreement between Nepal and India would prove crucial to enhance bilateral energy trade.
The PEC meeting also agreed on the draft guideline of the energy banking mechanism that incorporates methodology and structure of energy banking.
Currently, NEA has been purchasing electricity from India on a need basis from Bihar, Uttar Pradesh and Uttarakhand under the ‘purchase and pay’ mechanism.

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