India's decision to import more energy from Nepal will help reduce Nepal's whopping trade deficit with India
Soon after Prime Minister Sher Bahadur Deuba paid a visit to India on April 1-3, the Indian government has given Nepal permission to export an additional 326MW of electricity to the Indian energy market during the wet season. The Energy Exchange under India's Power Ministry on Wednesday granted the state-owned Nepal Electricity Authority (NEA) permission to trade an additional 326MW of power in the Indian power exchange market under the "day-ahead-market' modality. Earlier, the Power Ministry had allowed the NEA to sell only 39MW of electricity generated from Trishuli (15MW) and Devighat (24MW) hydel projects built with Indian assistance to the Indian energy market. As per the new arrangement, the NEA will be allowed to export 140MW of electricity from Kaligandaki A, 68MW from Middle Marshyangdi, 67MW from Marshyangdi and 51MW from Likhu-4, a private undertaking.
With this, Nepal will be selling up to 365MW of power at a competitive price in the Indian energy exchange market, where Nepal has been allowed to take part on a daily basis. India's decision to import additional energy from Nepal coincides with the release of the Nepal-India Joint Vision on Energy Cooperation during PM Deuba's visit.
Addressing a press conference on Wednesday, Minister for Energy, Water Resources and Irrigation Pampha Bhusal said India's decision to buy additional energy from Nepal will help reduce Nepal's whopping trade deficit with India. Nepal had earlier proposed selling energy from at least eight power plants, including the 456-MW Upper Tamakoshi, during the monsoon, when Nepal's most run-of-river (RoR) hydel projects run at full capacity, generating more energy than the country can absorb. The NEA will be exporting energy to India from the 400-kV Dhalkebar-Muzaffarpur cross-border transmission line.
While India's decision to import more electricity from Nepal is a step forward in energy cooperation between the two countries, India should also be flexible in allowing Nepal to sell its energy to Bangladesh through its transmission lines as per the spirit of the vision paper. India had no option other than to purchase Nepal's surplus energy during the summer season as it faced a short-supply of coal and natural gas for its thermal plants from third countries. At the same time, Nepal should also work on bridging the yawning gap between demand and supply of energy during the dry season. In order to bridge this gap, the government needs to encourage the domestic private sector to make investments in peaking and reservoir type projects, which can ensure constant supply of energy round the year. The NEA has stopped reaching new power purchase agreements (PPA) with the private sector on RoR projects for the last three years, citing that the PPA for RoRs totaling 5,250MW, which is 35 per cent of the energy-mix policy, has already reached its limit. However, the domestic private sector is reluctant to make investments in peaking and reservoir projects, which involve more investment compared to RoR projects.
Should the domestic private sector opt for peaking and reservoir projects the government should offer it more incentives.
Drugs control plan
Drug abuse is a serious problem in Nepal, with the number of drug abusers said to be growing at more than 5 per cent annually. It is hard to tell the exact number of drug abusers in the country, but they are said to number about 130,000, with women making up about 8,300. No urban centre is immune to drug abuse, with the three cities of the Kathmandu Valley, Pokhara, Dharan and Nepal-India border points particularly prone to the malaise. Apart from the physical and mental effects, growing multi-drug use, addiction and needle sharing are making drug abusers prone to hepatitis, venereal disease and HIV/AIDS.
There is a Narcotics Control Act, 1976 to prevent abuse and drug trafficking. However, it has not proved very effective. The government has, thus, prepared the Narcotics Prevention and Control National Master Plan to replace the Act prepared 45 years ago.
The five-year master plan that will be enforced from next year incorporates protocols and criteria for treatment and rehabilitation, and inclusion of subject matter in the educational curriculum, among others. But for the plan to succeed, the government must regulate the open border with India to control the trafficking of drugs.
A version of this article appears in the print on April 8, 2022, of The Himalayan Times.
