KATHMANDU, Nov 28: SAARC foreign ministers on Thursday signed the SAARC Framework Agreement on Energy Cooperation (Electricity) which paves the way for trade of energy at the regional level like other commodities. This is the only agreement signed at the 18th SAARC Summit 2014 that concluded in Kathmandu on Thursday.
Energy expert and former secretary Surya Nath Upadhyaya said that Nepal succeeded to convince India for Power Trade Agreement (PTA). “Now the agreement has been extended at the regional level,” he said.
Experts say the agreement is important for a country like Nepal as it can be a net electricity exporter, thanks to its abundant hydropower potentials. The agreement is said to be a crucial step toward developing a SAARC Market for Electricity on a regional basis.
SAARC Energy Center based in Islamabad had long been doing groundwork for such agreement. SAARC energy ministers had finalized the framework agreement document at a meeting held in New Delhi on October 16 and 17.
Nepal signed Power Trade Agreement (PTA) with India in September after pushing it for more than five years. Experts say the regional power trade agreement is the extended form of PTA signed between Nepal and India, as it, in principle, allows Nepal to sell energy to any other countries.
Khadga Bahadur Bisht, president of Independent Power Producers´ Association Nepal (IPPAN), said the agreement is a step forward toward opening a regional electricity market“ “It´s the biggest achievement for the country´s hydropower sector,” Bisht said, adding that harmonization of laws between importing and exporting countries, and grid connectivity is necessary to begin power trading. “Any intentional non-tariff barriers by any country, as in other commodity trade, will not affect electricity flow after the trading kicks off.”
SAARC member countries´ intra-regional trade hovers around 5 percent of their total trade due to various factors like the non-tariff barriers.
Keshav Dhwaj Adhikari, spokesperson of the Ministry of Energy (MoE), said the agreement extended form of PTA signed between Nepal and India in September.
It is learnt that Pakistan gave its consent to the agreement at the eleventh hour. Pakistan was not represented the SAARC Energy Minister´s Meeting held in New Delhi.
Adhikari said that the umbrella agreement is a commitment of all the government to facilitate electricity trading at the regional level“ “The framework provisions governments to enable their agencies for grid connectivity, policy harmonization and trading as well as facilitating the supply of electricity to power-deficit cities,” added Adhikari.
He also said the framework agreement comes into effect from Thursday.
Along with Nepal, India has already signed bilateral energy trading agreements with Bangladesh and Bhutan and begun electricity trading with the two South Asian neighbors.
Source : Republica
States agree on ‘free’ power trade
KATHMANDU, NOV 28 – In a major boost for energy cooperation in the South Asian region, Saarc member countries have agreed for ‘Saarc Framework Agreement on Energy Cooperation (Electricity)’.
Foreign ministers of all the member countries signed the agreement on Tuesday at the 18th Saarc Summit, opening the door for electricity trade among the countries. Although it was the only agreement signed at the summit, energy cooperation was one of the themes that the majority of Saarc heads of state and government touched upon during their address to the inaugural session of the summit on Wednesday. Prime Minister Sushil Koirala hailed the signing as “an important agreement for Nepal and other states in the region.”
After initial reservations, Pakistan finally ratified the agreement after other heads of state and governments took up the matter with Pakistan Prime Minister Nawaz Sharif at Dhulikhel retreat.
With the energy pact in place, all the Saarc members have agreed to “enable” the concerned agencies in their respective countries to develop transmission interconnectivity within the region. The agreement would allow power supply from surplus countries to those with deficit in the region.
The member countries have also agreed to gradually lift barriers, including the customs duty for enhancing the regional connectivity as per the laws and acts of all the member states.
Besides being a catalyst for development and trade of electricity across the region, the agreement is expected to provide a huge opportunity for Nepal, according to officials. “This agreement will attract more foreign investments and make the market more competitive. A big foundation has been laid with the development of regional electricity market for energy sector development,” noted Energy Secretary Rajendra Kishore Kshatri. He added that the agreement also guarantees non-discriminatory access to electricity and expansion of transmission network for trade facilitation within the region.
According to Keshav Dhowj Adhikari, joint secretary at the Energy Ministry, the “umbrella” agreement encourages the member countries to enter into public-private partnership for regional grid connectivity.
“For a country like ours, it opens up a huge opportunity of electricity export,” said Adhikari. “Bangladesh has expressed interest to invest in hydropower projects in Nepal and buy electricity.”
During the 15th Saarc Summit held in Colombo in 2008, the regional leaders had stressed the need to develop the regional hydroelectricity potential, grid connectivity and gas pipelines.
At a meeting held a year later in the Bhutanese capital Thimphu, the Working Group on Energy rephrased the proposal as ‘Regional Inter-Governmental Framework Agreement’ and included other thermal energy sources within the ambit of energy sources.
The fifth meeting of the Saarc Energy Ministers held on October 16-17 in New Delhi had finalised the framework agreement and was subsequently endorsed by all member countries except Pakistan, which was absent at the time. Most of the member states’ Cabinet had endorsed the agreement before its ratification on Thursday.
According to officials, the agreement will facilitate development of a South Asian Association for Regional Cooperation Market of Electricity (Same).
Source : eKantipur