Energizing India-Nepal ties

GS paper 2

Syllabus: Bilateral, regional and global groupings involving India and affecting India’s interests

 

Source: The Hindu

Context:

• The Investment Board Nepal signed a Memorandum of Understanding (MoU) with India’s National Hydroelectric Power Corporation (NHPC) Limited to develop the West Seti and Seti River (SR6) projects — a total of 1,200 MW.

 

Background:

• Withdrawal of China: China withdrew from the Seti project before Nepal decided to grant the project to India
• Issues of Resettlement and rehabilitation: In an MoU in 2012, China’s Three Gorges International Corporation was assigned to develop the project, but it withdrew in 2018, citing issues of resettlement and rehabilitation.

 

Other Projects involving India:

• Mahakali Treaty (6,480 MW)
• Upper Karnali Project (900 MW)
• Arun Three projects (900 MW)

 

Benefit of this project for India:

• Geopolitical influence of China: It will help India minimize the Chinese influence and firm its presence in Nepal.
  • The West Seti Hydroelectric Project was a major Chinese venture under the Belt and Road Initiative.
• Cross-border exchange: The project has the potential to enhance cross-border power exchanges between the two countries.
• Growing energy demand: The West Seti Hydroelectric Project can provide an added alternative and viable way to address power deficits.

 

Steps needed for its success:

• Investment-related constraints: There needs to be a careful study of investment scenarios, particularly a conducive investment environment, distribution and transmission network and cost of resettlement and rehabilitation, at the preliminary stage.
• Nepal’s concern about electricity rates and supply from India: To address these concerns, the new MoU has already revised the percentage share of energy that Nepal will receive free of cost from the generation projects to 9(twenty-one point nine)% from 10%.
• Domestic demand: The MoU allows Nepal to request the NHPC to sell the power generated from the projects to the domestic market before selling whole or part to the export market.
• BBIN energy cooperation: The project can also be extended to other regional partners under the Bangladesh-Bhutan-India-Nepal (BBIN) framework for cross-border energy cooperation.

 

Insta Links:

India-Nepal ties

India and Nepal Border Dispute

west Seti Power Project

 

Mains Links:

Q. The long-sustained image of India as a leader of the oppressed and marginalized Nations has disappeared on account of its newfound role in the emerging global order” Elaborate. (UPSC 2019)

 

Prelims Links:

• Mahakali Treaty
• Upper Karnali Project
• Arun Three projects
• West Seti project
• India Nepal border dispute mapping
• BRI