Water Resources and Energy Cooperation

A three–tier mechanism established in 2008, to discuss all bilateral issues relating to cooperation in water resources and hydropower has been working well. Regular meetings are being conducted on and off site. In the area of river training and embankment construction, Government of India has been providing assistance to Nepal for strengthening and extension of embankments along Lalbakeya, Bagmati and Kamala rivers. Started in 2008, with the present assistance, the total grant assistance already disbursed for embankments construction along these rivers amounts to over NR 4.5 billion.

• A Development Authority was set up in September 2014 to carry out the Pancheshwar Multipurpose project. A Power Development Agreement (PDA) for the 900 MW Arun-3 hydroelectric project between India’s Satluj Jal Vidyut Nigam Limited and the Investment Board of Nepal (IBN) was concluded in November 2014. Also, a PDA for the 900 MW Upper Karnali hydroelectric project was concluded between IBN and M/s GMR in September 2014. In February 2017, Cabinet Committee on Economic Affairs approved the investment for generation component of Arun-3 HEP for an estimated cost of Rs 5723.72 crore at 2015 price level.
• There are more than twenty 132 KV, 33KV and 11KV transmission interconnections which are used both for power exchange in the bordering areas and power trade. This first high capacity Dhalkebar (Nepal)-Muzaffarpur (India) cross-border power transmission line charged at 132 KV was jointly inaugurated by Prime Minister Narendra Modi and Nepali Prime Minister K.P. Sharma Oli, during the latter’s visit to India in February 2016, through which 80 MW of electricity is being supplied to Nepal. The line is expected to be ready for operation at 400 KV by August 2019.
• The two 132 KVA lines between Kataiya-Kushaha and Raxaul-Parwanipur built with Indian grant assistance were inaugurated during PM Deuba’s visit to India in August 2017, enabling import of an additional 100 MW of power. At the request of Nepal, in order to alleviate power shortages during winters, an additional 220/132k V, 100 MVA transformer was installed to supply additional 80 MW of power to Nepal from 1 January 2017 onwards from Muzzafarpur-Dhalkebar transmission line. A total of about 350-370 MW of power is currently being supplied to Nepal through different transmission lines, majority of the power import is done through Dhalkebar-Muzaffarpur, Kataiya-Kusaha, Tanakpur-Mahendranagar and Ramnagar-Gandak Transmission Lines. Nepal Electricity Authority and NTPC Vidyut Vyapar Nigam (NVVN) signed a supplementary Power Purchase Agreement in May 2017 for importing 160 MW of electricity through the Muzaffarpur-Dhalkebar Transmission Line, extended till December 31, 2017.
• An Agreement on “Electric Power Trade, Cross-border Transmission Interconnection and Grid Connectivity” was signed between GoN and GoI on 21 October 2014. Two mechanisms, Joint Working Group (JWG) and Joint Steering Committee (JSC) envisaged under the Agreement have been established and met in November 2014.
• A Joint Technical Team (JTT) has been formed for preparation of long-term integrated transmission plan covering projects upto 2035. On 5th December 2016, Ministry of Power, Government of India has issued guidelines on cross-border trade of electricity. The Fourth meeting of JWG/JSC was held in Kathmandu from 13-14 February 2017. The next meeting is scheduled to be held in New Delhi.