Decks cleared for India's GMR to develop Nepal power project

Nepal's cabinet has cleared the decks for India's GMR to develop the 900 MW Upper Karnali hydropower project.

The Project Development Agreement (PDA) of Upper Karnali, prepared by Investment Board Nepal (IBN) in consultation with GMR, was seen as a bottleneck in developing the project. The negotiation started more than three years ago.

The meeting late Thursday night also endorsed the Power Trade Agreement (PTA) that Nepal and India recently initiated in New Delhi.

The cabinet also directed the IBN to sign the PDA deal with India's GMR-ITD Consortium. An IBN board meeting chaired by Prime Minister Sushil Koirala had endorsed the PDA Wednesday.

After the IBN board asked the IBN to make some amendments, the board forwarded the revised PDA to the cabinet for final endorsement Thursday afternoon.

The PTA was signed by the respective power secretaries of the two countries in New Delhi Sep 5. The "Electric Power Trade, Cross-Border Transmission Interconnection and Grid Connectivity" document will open new avenues in the country's energy sector enabling neighbouring nations to trade energy.

According to the cabinet decision, Energy Secretary Rajendra Kishore Kshatri and IBN Chief Executive Officer Radhesh Pant have been authorised to sign the PTA and PDA documents, respectively, on behalf of the government.

Both the power-related pacts are opposed by the Nepal's Maoist parties which have termed these as anti-national and against Nepal's national interest.

The Rs.140-billion project is considered as one of the cheapest hydropower projects in Nepal. Located in far western Nepal, the project will export power from Nepal. According to the pact, Nepal will have 27 percent free equity and will get 12 percent free energy from the project.

It was agreed during the visit of Indian Prime Minister Narendra Modi to Nepal in the first week of August to sign these two landmark power-related pacts within 45 days.

(Anil Giri can be contacted at girianil@gmail.com)