India and Nepal sign long-term power agreement

New Delhi: India on Thursday inked an agreement to purchase 10,000 MW of power from Nepal in the next 10 years.

External Affairs Minister S Jaishankar and Nepal’s Energy Minister Shakti Bahadur Basnet witnessed the signing of the agreement. They also remotely inaugurated the Raxaul-Parwanipur, Kushaha-Kataiya and New-Nautanuwa-Mainahia cross-border transmission lines.

The long-term power trade agreement between India and Nepal was envisaged when Prime Minister Narendra Modi hosted his counterpart, Pushpa Kamal Dahal, aka Prachanda, in New Delhi in late May and early June last year.

The 25-year agreement will allow the power trading companies of the two nations to ink deals for five years or 10 years. The agreement will be renewed automatically for 10 years after the first 25 years unless either side will seek to terminate it.

On the sidelines of Jaishankar meeting his counterpart N P Saud in Kathmandu, New Space India Limited and the Nepal Academy of Science and Technology also signed an agreement setting the stage for India to help launch Nepal’s Munal satellite on its Polar Satellite Launch Vehicle (PSLV).

“Discussions focused on our overall bilateral ties, trade and economic relations, land, rail and air connectivity projects, cooperation in defence and security, agriculture, energy, power, water resources, disaster management, tourism, civil aviation, people-to-people and cultural exchanges and development partnership,” Jaishankar posted on X after he and Saud chaired the 7th meeting of the India-Nepal Joint Commission in Kathmandu.

New Delhi also agreed to provide financial aid of approximately Nepalese Rupees 1,000 crore to Kathmandu for the reconstruction of Jajarkot and Rukum West – the areas worst hit by the November 3, 2023, earthquake that killed 153 people in Nepal. Jaishankar’s meeting with Saud also saw India formally handing over to Nepal the fifth tranche of relief supplies for the quake-hit people.

Two other agreements were also signed on Thursday – one for India funding high-impact community development projects in Nepal, raising the budgetary ceiling from Nepalese Rupees 5 crore to Nepalese Rupees 10 crore, and another for cooperation in renewable energy.

The new long-term power trade agreement will set the stage for India to encourage mutually beneficial investments in Nepal's hydropower generation sector and transmission infrastructure.

Jaishankar earlier on the day called on Prachanda and Nepalese President Ram Chandra Paudel. He also had courtesy meetings with Nepal’s former prime ministers, K P Sharma Oli and Sher Bahadur Deuba.