India willing to purchase power at ‘market rate’

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    India has said that it is willing to purchase excess electricity from Nepal at the market rate, as trade in power between the two countries would create a win-win situation for both.

    The statement comes at a time when the draft of power trade agreement (PTA) forwarded by India to Nepal has landed in controversy, with some political parties calling on the government not to sign the deal in haste.

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    “Nepal can generate whatever electricity it needs for domestic consumption and export the excess power, which India will buy at market rates,” Joint Secretary of the Indian Ministry of External Affairs Syed Akbaruddin told a press conference held on the sidelines of the Nepal-India Joint Commission meeting in Kathmandu today.

    To facilitate and promote electricity trading, Akbaruddin said, India was willing to sign the PTA whenever ‘Nepal feels comfortable’. He also indicated India does not want to dictate any terms in this regard, as ‘Nepal has prerogative over its natural resources’. 

    Trade in power, according to Akbaruddin, would create a win-win situation for both the countries, as it would help Nepal narrow down trade deficit and help India in its economic development endeavour.

    “Trade in power will create a win-win situation for both nations, as balance of trade (between Nepal and India) is tilted towards India. One way to (bridge) this is by (supplying) power to India, as we export lots of petroleum products (to Nepal),” Akbaruddin said.

    While exporting power is in Nepal’s interest, the southern neighbour is also interested in importing power from Nepal to give impetus to economic development, which, according to Akbaruddin, ‘is a priority for India’.

    Nepal has long been trying to enter into power trade agreement with India so that it can purchase any quantity of electricity during lean seasons and sell any quantity of power during the peak seasons. Once such a pact is signed, it will replace the existing Power Exchange Agreement between the two neighbouring countries which caps electricity trading.

    PTA is also necessary to attract foreign investors towards the hydro sector, as Nepal Electricity Authority (NEA), the sole buyer of electricity in Nepal, has started becoming choosy in signing power purchase agreements (PPAs) as it has already approved enough projects to roughly meet the country’s electricity demand till 2019-20.

    As of April, NEA had signed PPA for generation of 1,998 MW of electricity during peak seasons. These projects will start generating electricity within December 2019.

    The country’s peak electricity demand will hover around 2,052 MW in fiscal 2019-20 from 1,387 MW in 2014-15, according to NEA.

    Source : The Himalayan Times