Energising India-Nepal ties, the hydropower way

Source– The post is based on the article “Energising India-Nepal ties, the hydropower way” published in The Hindu on 28th September 2022.

Syllabus: GS2- India and its neighborhood relations

Relevance– India Nepal hydro diplomacy

News– The article explains the potential of the West and East Seti River projects for India and Nepal. It also talks about the steps needed for the successful completion of the project.

Recently, Nepal signed a Memorandum of Understanding (MoU) with India to develop 1200 MW West Seti and EastSeti River (SR6) projects.

What is the historical background of the project?

The project was conceived in the early 80s.

The Australian company was engaged in developing the project during 1997-2011.

In 2011 project was handed over to a Chinese company. China withdrew from project in 2018

It was then remodeled by Nepal as the East and West-Seti-river joint project.

What is the potential of the project?

Improvement in relations– It can provide India the much-needed leverage in future hydropower cooperation. India is already involved in the Mahakali Treaty (6,480 MW), the Upper Karnali Project (900 MW) and the Arun Three projects (900 MW) in western and eastern Nepal.

The project has the potential to enhance cross-border power exchanges between the two

Countries.

Countering China– It will also help India minimise the geopolitical influence of China and firm its presence in Nepal. West Seti Hydroelectric Project was a major Chinese venture under the Belt and Road Initiative.

Benefits to Nepal- Nepal’s electricity exports to India are expected to increase foreign exchange and address the power shortage. It is estimated that if the hydropower potential is fully harnessed, Nepal can generate revenue of 1,069 billion rupees per year in 2045 by exporting electricity to India.

Benefits to India– The West Seti Hydroelectric Project can provide an alternative to address power deficits in India.

What steps need to be taken?

New options and alternatives need to be explored. Project costs have increased. There is a need for a careful study of investment scenarios, distribution, and transmission networks, and the cost of resettlement and rehabilitation, at the preliminary stage.

Nepal is concerned that the electricity rates and supply from India is inadequate to meet the rising demands. This needs to be taken care of.

The project can also be extended to other regional partners under the Bangladesh-Bhutan-India-Nepal (BBIN) framework for cross-border energy cooperation. A cross-border energy market that includes Nepal, Bhutan and north eastern states of India can be created.