September 23, 2008

India to Set Up Nepal Power Projects, Buy Electricity

Text of report headlined "India to generate 10,000 MW of hydropower and buy it from Nepal" by Indian newspaper Kantipur on 23 September

[by Rajendra Phuyal and Durga Khanal]

Kathmandu, [Monday] 22 September: The Indian government has announced that it is ready to generate 10,000 MW of hydroelectricity in Nepal in 10 years and then buy it.

An Indian company has said that the ambitious plan of hydropower development may come true if the government in Nepal acted with political commitment. It said that the power will be used to meet the domestic demand of Nepal and the surplus will be purchased.

Chairman and Managing Director of the Power Trading Corporation India Limited [PTCIL], an Indian government undertaking, Tantra Nath Thakur, expressed this view at a press conference on the eve of the Power Summit 2008 beginning in Kathmandu on Tuesday. It is the largest Indian company investing in the energy and power development sector. In 10 years, the demand for electricity in India will rise to 350,000 megawatts. We can generate power in Nepal economically and technically in the way Nepal wants and there is no dearth of market, he said. High power demand in India creates market opportunities for the neighbouring countries like Nepal and Bhutan, Thakur said. India has been currently importing 1,400 MW of power from Bhutan. The projects have been constructed under 60 per cent grants and 40 per cent loans by the Bhutan government.

The political commitment of the Maoist party and the recently presented government budget state that 10,000 MW of electricity will be generated in a decade.

Chief of the PTCIL, which is the organizer of the power summit, said that generating 10,000 megawatts of hydropower will require the investment of 2,000bn rupees. Such a huge investment is not possible in the absence of political commitment. Thakur said that his company was able to generate 7,000 megawatts of electricity in seven years and said that the political commitment should come from the ground level. According to the estimates of the Water and Energy Commission, Nepal has the potential of generating 83,000 megawatts of electricity. Out of that 42,000 megawatts are economically and technically viable. In 20 years from now, generation of 7,000 MW of electricity is sufficient for Nepal.

Electricity should be taken as a commodity and should not be politicized. Nepal has the full rights over the electricity generated in Nepal and hospitals, roads and schools could be built from the money that come by selling surplus power. "Both countries can benefit from the power trade," Thakur said.

Chairman of Nepal-India Chamber of Commerce and Industries Arun Kumar Chaudhary said that Prime Minister Pushpa Kamal Dahal had publicly talked about forming a high-level panel to increase Indian investment in Nepal's hydropower development during his recent India visit. Nepal has lost a huge electricity market in India because the issue of power development was politicized in the past, said Chaudhary.

"It is high time we realize that hydroelectricity is a commodity, not a political issue. Let us stop politicization on electricity," he said.

Chaudhary expressed the belief that the government will create an investor-friendly environment for hydropower development because the prime minister has expressed his commitment publicly. In the government budget presented recently, Finance Minister Dr Baburam Bhattarai has said that a high-level panel, headed by the prime minister, will be formed to sort out the problems in the development of hydropower.

The power summit has been held in Nepal for the past three years. The past summits had opened the door for public-private investment in the hydropower sector. The Nepal government has granted permission to two Indian companies to build the Arun III (402 MW) and Upper Karnali (300 MW) hydropower projects. The companies were chosen through a global tender bidding. The two countries have agreed to construct a 400KC power transmission line between the two countries.

Originally published by Kantipur, Kathmandu, in Nepali 23 Sep 08, p 1.

(c) 2008 BBC Monitoring South Asia. Provided by ProQuest LLC. All rights Reserved.