ADB May Facilitate Nepal-India Power Trading

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Researched by Industrial Info Resources India (Delhi, India)--Asian Development Bank (ADB) (Manila) has offered to help Nepal in developing its hydropower generation capacity and intends to play the role of a facilitator in power trading, especially with India.

"We would like to play the role of a facilitator not only in hydropower generation and transmission but also in cross border trading of power, especially between Nepal and India," said ADB Vice President Wencai Zhang.

India and Nepal have recently signed a landmark Power Trade agreement (PTA) to facilitate electricity exports and imports between the two neighboring nations. The deal, which is now awaiting ministerial approval, would provide Nepal easy access to an international market in the south, where it can sell electricity generated in the country.

Once the agreement comes into force, Nepal will be able to purchase electricity from India when production falls and sell power to the southern neighbor whenever there is a surplus. It would help Nepal cut its trade deficit with India and draw investors for the development of hydropower capacity in the country. India accounts for more than 66% of Nepal's export earnings.

For related information see September 8, 2014, article--India, Nepal Reach Much-Debated Power Trade Agreement

In the next five years, ADB may provide about $1.5 billion in the concessional Asian Development Fund resources to Nepal, to support its economy and sector reforms and investments in critical infrastructure such as energy, transport, urban services as well as agriculture transformation.

"Hydropower will be the major area of ADB's intervention in future. ADB is also ready to provide technical assistance in developing hydropower projects under public-private partnership concept," said Zhang. He also appreciated Nepal's efforts to accelerate a range of economic and sector reforms to boost public-private partnership in different sectors and expressed ADB's policy to extend support in hydropower sector in a substantial manner in the coming days.

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