May 22, 2024, Wednesday
Nepal 1:37:26 pm

India’s decision to purchase 10000 MW of electricity

The Nepal Weekly
September 12, 2023


As a major breakthrough in Nepal’s power trading sector, India has endorsed a memorandum of understanding (MoU) to import up to 10,000 megawatts of electricity from Nepal within a decade. The agreement has given an enormous boost to Nepal’s hydropower development. Nepal has been endowed with immense water resources but it requires huge investment and modern technology to generate power. Nepal has recently increased power generation but the pace of electricity production is not up to the mark. Currently, the country has installed capacity of producing around 2,600 MW of electricity. Nepal Electricity Authority (NEA) and its subsidiaries have so far generated 1,122.50 MW electricity while the private sector has installed 1,370 MW of power.

Similarly, small hydropwer plants and alternative energy sources have been generating 4.50 MW and 80 MW clean energy, respectively. Around 2,492.95 MW has been connected to the national grid and remaining 84.53 MW remains off-grid supply, according to a latest official data. With India ready to purchase large volumes of electricity from Nepal, the private sector’s suspicion regarding the supply of generated electricity has almost been resolved. According to the private investors, Nepal requires 10,000 MW electricity for internal consumption and India and Bangladesh may import 10,000 MW each, which means Nepal needs to generate 20,000 MW of electricity in the next ten years.

In yet another important development, the India has decided to buy additional 180 MW of electricity from Nepal effective from mid-September. Currently, India is importing 452 megawatts of electricity from 10 different projects through the Dhalkebar-Muzaffarpur cross-border transmission line during the rainy season. Nepal earned Rs. 11 billion by selling electricity to India last year.

The new decision of Indian authorities will also invite more foreign investment in hydropower sector. If we can export more electricity to India, it can certainly boost our economy and create employment in the country. Similarly, more electricity production means more industries coming into operation. If we can supply electricity to meet the growing demands of our industrial sector then it will naturally enhance our production capacity ultimately leading to new job creations. Every year hundreds of thousands of people leave the country in search of foreign employment. If we can create more jobs within the country then the trend of people going abroad for jobs can be arrested.