Nepal and India Agreed to sign Energy-Banking Deal. Image Source:

Nepal and India Agreed to sign the Energy-Banking Deal

The much awaited – Energy-Banking deal has been signed by Nepal and India which will ensure uninterrupted exchange of power between the two nations. The deal was signed on the 13th meeting of the Power Exchange Committee (PEC) which was held in New Delhi, India on 26th of December, 2018 (Wednesday).

The draft of the 13th PEC meeting is expected to be approved by the energy secretary-level joint steering committee meeting which is scheduled for January 2019. Nepal had long been demanding the Energy-Banking deal with India in a bid to ensure that the country is able to export its surplus electricity to India, especially during monsoon and import power from the southern neighbor when necessary. The energy banking mechanism allows Nepal to export power to India amid surplus generation and import the same amount of power when necessary.

Kul Man Ghising, managing director of Nepal Electricity Authority (NEA) and the leader of Nepal’s delegation at the PEC meeting, said that energy banking agreement between Nepal and India will prove crucial to enhance bilateral energy trade. The PEC meeting has also agreed on the draft guideline of the energy banking mechanism that incorporates methodology and structure of energy banking.

“The agreement has been forged on the guideline prepared for energy banking and will be implemented following approval from the secretary-level joint steering committee meeting,” said Ghising, adding that the decision to ink the energy banking deal with India is a ‘milestone achievement’ in the history of Nepal’s hydropower industry.

NEA Spokesperson Prabal Adhikari, informed that Nepal also proposed for an ‘energy book’ for the first five to seven years with India and India was positive in this regard. “Nepal will book for energy in the first five to seven years as it will take almost four years to construct the transmission line. The model of the investment mechanism will be finalized by the joint steering committee meeting,” said Adhikari.

Reference: The Kathmandu Post