India’s Designated Authority for Cross-Border Trade has approved an additional 251 MW of power exports from 12 hydropower projects in Nepal. For the first time, Nepal will be exporting power to Bihar through a medium-term power sales agreement. This approval increases the total allowed quantum from 690 MW from 16 projects to 941 MW from 28 projects.

Even before this 251 MW approval, Nepal had already become a net exporter of electricity, generating net revenue in the last fiscal year by selling electricity worth NPR 16.93 billion.

In October 2021, India approved 39 MW of power exports from Nepal for the first time. In less than three years, this figure has grown by more than 24 times. Nepal began its power exports by selling in the Day Ahead Market of the Indian Energy Exchange. Since then, India has also granted access to the Real-Time Market.

The Nepal Electricity Authority has also entered into medium-term power sales agreements with distribution companies in Haryana and Bihar. Additionally, India has introduced a provision that allows hydropower imports from Nepal to count towards the Hydropower Purchase Obligation (HPO) for buyers in India, further incentivizing buyers to purchase power from Nepal.

The Long-Term Power Agreement between India and Nepal envisions the sale of up to 10,000 MW of power from Nepal to India over the next 10 years. This is the first year of the Agreement, and around 1,000 MW of exports have already been achieved. With these developments, Nepal is on track to become the leading hydropower exporter in the South Asia region.

An agreement for the sale of 40 MW of power to Bangladesh has also been finalized and was planned to be signed on 28 July 2024, but it was postponed due to recent political developments in Bangladesh.

-Sweta Singh (Kathmandu)