Even as late as Wednesday night, Nepal and India appeared focused on forcing the other to blink first in icy negotiations. However, by early (and somewhat hot) Thursday morning in Delhi, the atmosphere had warmed up and the two sides sat down to sign a few crucial agreements.
The promised 'breakthrough' on the air route and the Pancheshwar Multipurpose Project did not occur during Prime Minister Pushpa Kamal Dahal's India visit. Despite reaching an agreement on long-term electricity trade, a definitive agreement has yet to be signed.
Among Nepal's three primary priorities—an additional air route from Mahendranagar to Nepal, a 25-year agreement on energy trading, and a definitive agreement on the Pancheshwar Multipurpose Project—officials from the two nations were at odds over long-term electricity trade agreement.
The Nepali delegates were irritated after India's National Security Adviser Ajit Doval and Indian Foreign Secretary Vinay Mohan Kwatra, who met with Dahal at the Hotel Maurya on Wednesday, proposed delaying the agreement. The Nepali side refused to sign the Lower Arun and Phukot Karnali hydropower projects unless India agreed to a new electricity arrangement.
Only on Thursday did the two parties reach an agreement.
Nepal was asking for a 25-year umbrella trade deal to sell electricity. The two sides established an agreement in principle at the level of the prime minister, but they have yet to finalize an agreement and exchange letters to that effect.
"Until Wednesday night, the Indian side was opposed to signing an agreement on the electricity deal." However, due to Nepal's steadfast stance on the Lower Arun and Phukot Karnali, the two sides struck an agreement on Thursday morning," a high-level Nepali official accompanying Dahal on the trip told the Post. "As the Indian Council of Ministers has yet to approve the agreement, there could be no exchange of letters."
"The two countries' energy secretaries signed a symbolic agreement." The purpose is to share data, letters amid a function in the near future.
Later, Indian Foreign Secretary Kwatra stated that Nepal and India have agreed to expand the amount of electricity exported to 10,000 MW over the following ten years. Nepal is currently permitted to export 452.6MW of electricity generated by ten hydroelectric projects in Indian power markets. Furthermore, Nepal must renew the permit for a specific project to export power to India each year, adding to the uncertainty.
Furthermore, the two countries agreed to construct the 480 MW Phukat Karnali Hydropower Nepal, which would be developed by India's National Hydropower Company. They also agreed to sign a project development agreement for India's state-run Satluj Jal Vidut Nigam's 679 MW Lower Arun project.
Nepali delegates appear encouraged by the long-term electricity trade progress. "As per the umbrella agreement, Nepalese and Indian companies can now directly sign medium- and long-term agreements on electricity import and export." Previously, we had to renew the agreement to export electricity from a hydropower project in Nepal every year," said Kulman Ghising, managing director of Nepal Electricity Authority.
"We don't have to do that going forward." The new agreement has now paved the path for buyers and sellers from the two countries to form agreements lasting five to 25 years."
According to Ghising, the electricity arrangement might be a beginning point for Nepal's development through energy export.
Nepali delegates appear encouraged by the long-term electricity trade progress. "As per the umbrella agreement, Nepalese and Indian companies can now directly sign medium- and long-term agreements on electricity import and export." Previously, we had to renew the agreement to export electricity from a hydropower project in Nepal every year," said Kulman Ghising, managing director of Nepal Electricity Authority.
"We don't have to do that going forward." The new agreement has now paved the path for buyers and sellers from the two countries to form agreements lasting five to 25 years."
According to Ghising, the electricity arrangement might be a beginning point for Nepal's development through energy export.
The Pancheshwar Multipurpose Project was Nepal's third major agenda item during Dahal's visit to India. India, on the other hand, reiterated its previous support to the project. Even after 26 years since the two countries signed the contentious Mahakali Treaty, the project's DPR has yet to be completed.
During the visits of Nepal's sitting prime ministers, the Indian side has maintained the status quo on the Pancheshwar Multipurpose Project. "Both countries have agreed to finalize the project's DPR once more." "We have directed officials from the respective countries to finalize the project mode within a year," Dahal added. During his visit to India last year, then-Prime Minister Sher Bahadur Deuba used similar words.
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