Nepal to sign power trade agreement with India

Kathmandu: Nepal’s three major political parties the Nepali Congress, CPN-UML and UCPN (Maoist) late on Tuesday consented to the government’s plan to sign a power trade agreement (PTA) with India during the forthcoming visit of Indian Prime Minister Narendra Modi. “We have decided to sign PTA (power trade agreement) with India, and to finalize the text of such proposal, a three-member cross-party panel was formed,” Narayan Kaji Shrestha, vice-chairman of UCPN- Maoist party, said.

If India agrees to sign the PTA as forwarded by Nepal before the visit, it will pave the way for export and import of electricity. But, the Indian expectation to generate power and develop 84,000 MW hydel-potential in Nepal is unlikely to be met this time, according to the understanding reached by the parties.

India wants one umbrella agreement for generation, development and power trading. The proposed PTA does not touch upon the generation and development of hydro electricity in Nepal either with 100 percent Indian investment or with 100 percent joint venture with or between the Indian companies. Besides Shrestha, other members of the panel are Finance Minister Ram Sharan Mahat from the Nepali Congress and Bhim Rawal from the UML.

The Nepali Congress and the UML are the ruling parties while UCPN (Maoist) is the main opposition which in the past has expressed anti-India sentiments. Besides leftist anti-India postures, water-nationalism is very strong in Nepal. Often, this lobby alleges that India is promoting Bhutanese model of developing hydro electricity in Nepal.

Due to intense pressure from Left hard-liners and strong water-nationalism, Nepal will not be signing the Power Cooperation Agreement (PCA) as proposed by Indian side May 8 that provides for hydro generation, development with Indian assistance and power trade.

“We have decided to focus only on power trade while skipping power generation and development,” said Shrestha. It is not known whether India will agree to this half-met-conditions proposal from Nepal, which misses the part on generation and development.

Similarly, the meeting also decided to seek Indian aid for Arun III (900 MW) hydro-electricity project during Modi’s visit, which is a gift and goodwill gesture of friendship.

During the meeting with Koirala in New Delhi soon after Modi was sworn-in, the Indian premier told Koirala that India wanted to gift a mega-power project to Nepal.

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