For years, Nepal and India have been sharing power. But the two have now decided to boost the volume of trade with the signing of a memorandum of understanding (MOU) between the Nepal Electricity Authority and Infrastructure Leasing and Financial Services of India — both public sector undertakings run on commercial canons. At the heart of the deal is the laying of transmission lines capable of taking excess electricity from one side of the border to the other, as the capacity of the existing transmission lines falls far short of the needs. As profit is the driving motivation, this project is likely to be carried into execution efficiently and expeditiously. According to the MOU, the transmission lines will connect four power stations in each country. Despite the Power Purchase Agreement between the two countries, greater power sharing has not been possible because of the failure to upgrade the transmission lines.

The idea behind the MOU is to reap mutual benefit. During the monsoons, Nepal produces excess electricity but the bordering Indian states of Bihar, Uttar Pradesh, and West Bengal face a power shortage, whereas in winter, when Nepal’s rivers subside, it is forced to make big power cuts, as is indicated by the increase, beginning from yesterday, in the hours of the latest bout of load-shedding to three times the existing level. Now, power generation from run-of-river projects is reported to have dropped to 230 MW, i.e. half the full capacity, and as a result, the capital and several towns will suffer. In weeks to come, power outage is expected to rise further. These states have their own tales of woe to tell, but thankfully, Nepal and India face power crunch in two different seasons. This has made the idea of power sharing mutually attractive and beneficial.

But in the absence of high-voltage transmission lines, this mutual satisfaction of power needs has not been possible, except for whatever could be made available through low-voltage ones. The construction of 220 KV transmission lines will thus represent a big jump in capacity. While they will be able to carry all the agreed excess power across the border, their spare capacity is expected to take up bulk export of power to India when Nepal starts producing more electricity once the proposed hydropower plants, expected to be awarded to Indian and third-country investors, link to the national grid. As for equity participation, the Indian side will have nearly one-fourth of the total in Nepali side of the corridors, and the Nepali side will have nearly the same percentage of equity stakes in the Indian side. This power-sharing idea also stresses the point that next-door neighbours like India and Nepal have certain areas of cooperation which may be extremely difficult to materialise with countries separated by distance. In the past, Nepal and India failed to turn to mutual advantage the vast possibilities that could have been derived from the exploitation of Nepal’s tremendous water resources because of misunderstanding and doubts. This should give both food for thought.