Nepal | April 03, 2020

Cross-border electricity trade and investment stressed

Himalayan News Service

Kathmandu, March 17

As the per capita energy consumption in South Asia is relatively low, member nations have been advised to boost regional cooperation in cross-border investment in power sector and electricity trade.

Since bilateral electricity trade has been in practice since long between India and Bhutan, India and Bangladesh, Nepal and India, experts have suggested developing regional grid and transmissions for robust electricity trade. Cooperation on energy can transform the future of South Asia through supply of clean, reliable, affordable and sustainable energy in the region, say experts.

Launching a book titled ‘ Regional Investment Framework and Guidelines for Promoting Investment in South Asian Power Sector and in Cross-Border Electricity Trade in South Asia’ prepared by a think-tank, Integrated Research and Action for Development (IRADe) and South Asia Regional Initiative for Energy Integration (SARI/EI) under the assistance of USAID, in the South Asian Business Leaders Conclave, Ambassador of the United States to Nepal Alaina B Teplitz said that energy security is a critical issue for the entire South Asian region. Stating that to raise the per capita energy consumption to 3,000 kilowatt hours of global average from current 650 kilowatt hours, South Asian economies have to promote intra-regional investment in generation and transmission of the electricity and cross-border trade.

She underlined the positive development in the region’s commitment for energy cooperation through ‘Framework Agreement on Energy Cooperation’. South Asian countries have already signed the agreement in 2014, and Nepal and India signed Power Trade Agreement the same year.

Currently, around 2,300 megawatts of power is being traded in the BBIN (Bangladesh, Bhutan, India, Nepal) sub-region and the prospect of electricity trade is high in this region.

Against this backdrop, the United States Millennium Challenge Corporation (MCC) has pledged assistance to develop 300-km high capacity transmission line in Nepal.

US Ambassador Teplitz further said that the existing arrangements between the countries in electricity trade will provide a foundation for multilateral arrangements and transactions in the region.

She underpinned the need of building strong and effective regulatory regimes, designing competitive market pricing mechanisms, developing solid contracts and agreements, setting up dispute resolution mechanisms and supporting technical and regional coordination agency that can facilitate regional planning and development.

In the programme, Deepak Amitabh, chairman and managing director of PTC India, highlighted the potential of energy pool as the load profile varies in different seasons in different countries. “The only thing we need is balancing the energy supply,” he said, adding, “For example, Nepal can export energy to India during the wet months, and purchase from its southern neighbour during the dry season.”

Mohammad Tamim, a professor at Bangladesh University of Engineering and Technology, said that the there is a need of conducive policies for investment and economic liberalisation to achieve these targets.

A version of this article appears in print on March 18, 2018 of The Himalayan Times.

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