Unleashing Nepal's Hydropower Potential: A Strategy for Exporting 10,000 MW

Unleashing Nepal's Hydropower Potential: A Strategy for Exporting 10,000 MW
Credit goes to Kathmandu Post

Nepal, a country blessed with a wealth of water resources, has the potential to become a significant player in the hydropower sector. The recent announcement by Indian Prime Minister Narendra Modi, during the visit of Nepal's Prime Minister Pushpa Kamal Dahal, set a target of importing 10,000 megawatts (MW) of electricity from Nepal over the next decade. This ambitious goal has sparked discussions on how Nepal can leverage its hydropower potential and the challenges it needs to overcome.

The Power Trade Agreement: A Milestone for Nepal

The power trade agreement between Nepal and India, awaiting India's Cabinet endorsement, is a significant milestone. This 25-year deal, which can be renewed every ten years, paves the way for power purchase agreements (PPAs) for five years or more. This agreement guarantees a market for Nepal's excess power, potentially attracting domestic and foreign investments in Nepal's hydropower sector.

The Hydropower Potential of Nepal

Nepal's hydropower potential is immense. The Nepal Electricity Authority (NEA) has already signed PPAs for projects with a combined capacity of 7,300 MW. Additional projects with a combined capacity of around 12,000 MW are awaiting PPA signing with the NEA. With the right investment and infrastructure, Nepal could potentially produce over 10,000 MW in the next ten years.

Overcoming Transmission Infrastructure Challenges

While the power trade agreement is a significant step forward, the delivery of power poses a challenge due to Nepal's current transmission infrastructure. The country lacks high-capacity transmission lines for domestic transmission, and the only 400kV line in operation is the Dhalkebar-Muzaffarpur Cross-Border Transmission line used for cross-border trade. To export the targeted 10,000 MW to India, Nepal needs to develop high-capacity domestic and cross-border transmission lines.

The Future of Hydropower in Nepal

The power trade agreement with India is a significant opportunity for Nepal to harness its hydropower potential. However, it also highlights the need for strategic planning and investment in the country's power sector. The development of hydropower projects and transmission lines should go hand in hand to ensure the timely export of power.

The Role of the Private Sector

The private sector plays a crucial role in the development of Nepal's hydropower sector. However, despite the potential for significant returns, private sector investment has been slow due to regulatory hurdles and infrastructure challenges. The power trade agreement with India could provide the necessary impetus for private sector investment, particularly from Indian companies.

The Path Forward

The goal of exporting 10,000 MW of electricity to India presents both opportunities and challenges for Nepal. It is a chance to boost investment in the hydropower sector and stimulate economic growth. However, it also underscores the need for robust infrastructure development and strategic planning to realize this potential. With the right policies and investments, Nepal can harness its hydropower potential and become a significant player in the regional energy market.