India and Nepal on Monday agreed to build a 695-megawatt hydroelectric power plant in the Himalayan country, Reuters reported, citing officials. This will allow Nepal to tap into its abundant supply of clean energy to ease power shortages, according to the news agency.
India is investing billions of dollars in the electricity trading deal with Nepal. The project named Arun IV is being jointly built on the Arun River in Nepal’s east region by state-owned Nepal Electricity Authority and India’s Satluj Jal Vidyut Nigam Limited. While Nepal owns 51% of the equity, India holds 49%.
“Nepal will get 152 megawatts of free electricity from the plant for its consumption and the rest will be split between the two on the 51% and 49% basis,” Nepal Electricity Authority spokesperson Suresh Bahadur Bhattarai told Reuters. “Cost of the project is being worked out and whatever it comes will be shared as per the above ratio.”
The Memorandum of Understanding was signed between Satluj Jal Vidyut Nigam chairperson Nand Lal Sharma and Nepal Electricity Authority Managing Director Kulman Ghising, PTI reported.
Satluj Jal Vidyut Nigam has three projects with a total capacity of 2,059 megawatts in Nepal. By 2030, the public sector undertaking is targeting to have 5,000-megawatt projects in the Himalayan country, PTI reported.
Nepal is currently negotiating with Indian companies to export its excess energy to the country. Prime Minister Narendra Modi has extended India’s support for developing Nepal’s hydropower and encouraged Indian developers to explore more such projects.
The hydroelectric power plant agreement is one among the six deals that Modi signed with Nepal Prime Minister Sher Bahadur Deuba during his fifth visit to the Himalayan country on Monday, according to the Ministry of External Affairs.
Modi held bilateral talks with Deuba in Lumbini, Nepal.
During the bilateral talks, the two prime ministers also discussed specific initiatives and ideas to further strengthen cooperation in various sectors, including culture, economy, trade, connectivity, energy and development partnership.
The two countries will work on establishing relations between the two Buddhist sites of Nepal’s Lumbini and Uttar Pradesh’s Kushinagar. Modi also laid the foundation stone of the India International Centre for Buddhist Culture and Heritage.
The visit also “emphasizes the deep and rich civilizational connect between India and Nepal and the contribution of people on both sides to foster and promote it,” said the Ministry of External Affairs.
India and Nepal’s relations are “unshakeable like the Himalayas”, said Modi in his speech at the Buddha Jayanti event at Lumbini, The Indian Express reported. “India and Nepal’s ever-strengthening friendship will benefit the entire humanity in the emerging global situation.”