India Approves Additional 251 MW Power Exports from Nepal
In a significant development for regional energy cooperation, India’s Designated Authority for Cross-Border Trade has approved an additional 251 megawatts (MW) of power exports from 12 hydropower projects in Nepal. This latest approval marks a milestone, as Nepal will, for the first time, export power to Bihar through a medium-term power sales agreement.
The new approval raises Nepal’s total allowed power export quota from 690 MW across 16 projects to 941 MW from 28 projects. This expansion underscores Nepal’s growing role as a key player in the regional energy market.
Prior to this approval, Nepal had already established itself as a net exporter of electricity, generating a notable net revenue of NPR 16.93 billion in the last fiscal year. Since India approved its initial 39 MW of power exports in October 2021, Nepal’s export capacity has surged by more than 24 times. Initially entering the Indian market through the Day Ahead Market of the Indian Energy Exchange, Nepal has since gained access to the Real-Time Market.
The Nepal Electricity Authority has also secured medium-term power sales agreements with distribution companies in Haryana and Bihar. Additionally, India has implemented a new provision allowing hydropower imports from Nepal to contribute towards the Hydropower Purchase Obligation (HPO) for Indian buyers, further boosting the appeal of Nepalese power in the Indian market.
The Long-Term Power Agreement between India and Nepal envisions the sale of up to 10,000 MW of power over the next decade. In its inaugural year, around 1,000 MW of exports have already been achieved. With these advances, Nepal is well-positioned to become the leading hydropower exporter in South Asia.
An agreement for the sale of 40 MW of power to Bangladesh was scheduled to be signed on July 28, 2024, but has been postponed due to recent political developments in Bangladesh.
