New Delhi: Weeks after India signed an agreement with Nepal for long-term purchase of power, China has now warned the Himalayan nation that the deal will hurt its hydropower sector. According to the agreement signed during the visit of External Affairs Minister S Jaishankar to Kathmandu earlier this month, India will purchase 10,000 MW of power from Nepal over the next 10 years.
According to a statement issued by the Indian Embassy in Kathmandu, under the agreement, "it has been agreed to strive to increase the quantum of export of power from Nepal to India to 10,000 MW within a timeframe of 10 years and towards this end take all necessary measures to encourage mutually-beneficial investments in Nepal's hydropower generation sector and transmission infrastructure”.
According to this agreement, various government and private entities in India will engage in power trade with Nepal through short-term, medium-term, and long-term contracts. Private sectors in Nepal can also participate in the import and export of electricity after completing the necessary procedures. In the joint statement issued during the visit of the Nepalese Prime Minister Pushpa Kamal Dahal to India last year, the premiers of both nations said the power export deal would be historic and significant. Nepal has already devised an energy development strategy with an objective of producing 28,000 MW of electricity in the next 12 years.
However, China has now warned Nepal that this agreement might lead to jeopardising its power projects and energy supply ambitions. An opinion piece headlined 'India's geopolitical game hurts outlook for Nepal's hydropower' in the Global Times, the acerbic daily English tabloid that serves as the mouthpiece of the Chinese Communist Party, stated: "While electricity trade between India and Nepal appears to give the former a commanding advantage against China in Nepal's hydropower sector, there is also growing concern as to whether India's geopolitical game of edging China out could jeopardise Nepal's power projects and energy supply ambitions."
The article cited Indian and Western media outlets as touting that the agreement signaled India's growing influence in the region. It also referred to a shift in India's power purchase policy that prevents the buying of electricity from projects financed by China. "In 2018, India changed its electricity buying policy to prevent the purchase of power produced via the investment of nations with which it does not have a 'bilateral agreement on power sector cooperation'," it stated.
Although it didn't explicitly mention China, hydropower produced by Chinese-funded or Chinese-built plants is actually excluded in power trade with Nepal. As a result, Nepal has removed Chinese developers from six hydropower projects and given four hydro contracts to Indian companies. Indian companies have contracts to build and operate 10 hydropower plants in Nepal, while Chinese developers have contracts for five such projects.
Read More
