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A power trade agreement (PTA) that will enable Nepal to export electricity to India is at the centre of what Kathmandu is eyeing during Prime Minister Narendra Modi’s visit.
There are debates in Nepal on what details of the agreement should be but everyone agrees it should be inked during Modi’s two-day trip beginning August 3 if Nepal wants to exploit its latent hydro-power potential.
On Tuesday, the three major parties—ruling Nepali Congress and Communist Party of Nepal (Unified Marxist Leninist) and opposition Unified Communist Party of Nepal (Maoist) formed a task force to finalize the agreement.
But there is concern among various stakeholders and parties on what should be the content and fine print of the agreement so that Nepal’s ‘national interest’ isn’t compromised.
“The PTA will help Nepal reduce its trade deficit with India and help meet India’s energy needs. Till we sign it investors will shy away from investing in our power sector,” said Upendra Yadav, former foreign minister and Chairman of Madhesi Jana Adhikar Forum.
Another former foreign minister and leader of Rastriya Prajatantra Party Prakash Chandra Lohani suggested formation joint committee comprising experts from both countries on how to utilize Nepal’s water resources for power generation, irrigation, flood control and water transport.
“Our main export will be to India but should be able to sell our surplus electricity to other countries as well,” said former power minister and senior UCPN (Maoist) leader Post Bahadur Bogati.
Most political parties are of the opinion that Nepal’s interests should be kept in mind while inking the deal and generation from hydro-power projects should be kept away from the agreement.
The Independent Power Producers Association of Nepal (IPPAN) asked the government to ensure open and non-discriminatory access to electricity exported from Nepal in India while signing the deal.
Nepal has 83,000 MW hydro-power potential, but the country suffers from severe power crisis as it is able to generate barely 800 MW and imports electricity from India during winter.
The country is expected to become power surplus by 2016 and signing PTA is important to export electricity to India and also attract more investments into the sector from India and other countries.
Besides PTA, there is also talk to signing power development agreement for 900MW Upper Karnali hydro project being developed by GMR Group and start stalled work on the Pancheswar and Arun-III power projects.
Completion of work on ongoing India-aided projects like Mid-Hill highway, Kathmandu-Terai fast track road, postal road in Terai and support for this year’s SAARC summit which Nepal is hosting are other things on Kathmandu’s agenda during Modi’s trip.