A trade agreement signed between Nepal and India on Thursday for Kathmandu to export 10,000 megawatts (MW) of hydroelectricity to India over the next 10 years, officials said, in a deal they expect will draw investment to the cash-strapped Himalayan nation.
Nepal’s rivers, cascading from the Himalayas, have the capacity to generate about 42,000 MW of electricity, but due to the lack of technical know-how and funds the country, wedged between China and India, produces less than 3,000 MW at present.
“This is a milestone for the attraction of investment for the development of our hydrosector,” Suresh Bahadur Bhattarai, a spokesperson for the state-owned Nepal Electricity Authority, said.
“But we need to update our laws and coordinate line ministries and other agencies to finish the work on time,” Bhattarai told Reuters.
Indian firms are at different stages of constructing, or negotiating with the Nepalese government to construct, power plants that could give output of a total of 8,250 MW, attracting billions of dollars, officials said.
Nepal hopes to export excess energy to India and narrow its huge trade deficit with its southern neighbour, they said.