NEW DELHI: As India is gearing up to generate 500,000 megawatts of energy from various sources in the next 20 years, there is an opportunity for Nepal to seek Indian assistance to harness its abundant hydropower potential.

Indian investors want Nepal to clarify on some vital issues before they decide to invest in Nepal's hydropower.

Indian authorities also believe that it is important for both the countries to jointly invest in the water projects since the stakes for both the countries are high in the projects.

"Now the government of India is looking big and does not want to develop power projects on the lines of Chukha hydel project (in Bhutan) only," said a source at National Hydroelectricity Power Corporation, an undertaking of the Government of India. India has built Bhutan's hydel project on its own and has been importing the surplus energy on mutually agreed principles.

Government of India invested to build the 336MW Chukha hydel project and is also buying the energy. The NHPC source said the government of Nepal needs to arrange for the improvement of infrastructure in the potential project areas and maintain logistics if it wanted to go for development of hydropower sector.

"It is imperative for Nepal government to build basic infrastructure to facilitate export of power into India. Then only will Indian investors be attracted to go to Nepal," said SN Agrawal, Vice President, SCCI and Group Chairman, Bhoruka Enterprises.

Agrawal, who had a meeting during the then Prime Minister Pushpa Kamal Dahal Prachanda's India visit last year, had discussed with Dahal Nepal's power issues, said political stability was a must for the speedy development of Nepal's hydropower sector.

"Government of Nepal needs to build at least high-intensity transmission lines in border areas in order to woo the Indian investors," added Agrawal.

Nepal's hydropower potential stands at 83,000 MW and experts believe that almost half the potential is economically viable to generate.

"Developing power projects in the Himalayan areas is very difficult, you could encounter some sort of problem any time," the NHPC source said about the challenges for both government of Nepal and Indian investors.

"The government of Nepal also needs to clarify whether hydropower will continue to be under the federal government's domain or it will be a state subject after Nepal adopts a federal set-up," the NHPC source added.

Another issue the Indian authorities are concerned about Nepal's hydropower is the price rate of the energy to be generated, the source said.