India has expanded power sector partnership with Nepal with Kathmandu awarding the much-delayed West Seti Hydropower Project and Seti River Hydropower Project in the western part of the Himalayan nation to a leading Indian firm nearly four years after China withdrew from these projects. A formal agreement on the projects was signed this week in Kathmandu in backdrop of a decision by the prime ministers of the two countries to focus on expanding power sector partnership that includes participation of Indian power majors in the projects in Nepal.
The estimated cost of the two projects is $2.4 billion. Earlier, two Chinese companies on two different occasions withdrew from the projects after signing MoUs, leaving Nepal in a big spot, it has learnt from Kathmandu-based sources. In 2017, state owned power utility Nepal Electricity Authority signed an agreement with the China Three Gorges International Corporation, a subsidiary of the China Three Gorges Corporation,
to set up a joint venture to develop the 750MW West Seti Project. The Chinese company withdrew from the project next year. Earlier in 2009, China National Machinery and Equipment Import and Export Corporation (CMEC) had signed an MoU for the project but withdrew within two years. In both cases, reasons for withdrawal were not convincing enough, Kathmandu-based sources claimed.
The MoU was signed between Investment Board Nepal and National Hydro Power Corporation Ltd to develop the two projects West Seti and Seti River (SR6) projects totalling 1,200MW. The 750MW West Seti and 450MW SR6 projects are spread over four districts Bajhang, Doti, Dadeldhura and Achham in far-western Nepal.
The West Seti project has been envisaged to generate energy throughout the year, storing excess wet season river flows in the reservoir, and using this water to generate energy during peak demand periods in the dry season (December-May)
Prime Minister Sher Bahadur Deuba following MoU said, “During my recent visit to India, Prime Minister Narendra Modi and I agreed on a vision statement on cooperation in the power sector, underlining the need for strengthening mutually beneficial bilateral cooperation in this sector.
Furthermore, during the visit of Prime Minister Modi ji [SIC] to Lumbini, we had a productive discussion on this matter and I invited the interested companies from India for the development of the West Seti Hydroelectric Project”. Deuba thanked India for boosting the electricity market for Nepal. Kathmandu can earn up to Rs 31,000 crore per year in 2030 and as high as Rs 1.069 lakh crore per year in 2045 if the country is able to sell electricity to India by harnessing its hydropower potential.
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