SAARC nations ink power deal opening regional trade

South Asian countries today signed a last-minute deal to trade electricity among themselves opening opportunities for development of hydropower projects in Nepal.
Before the SAARC summit concluded here in Kathmandu, foreign ministers of all the eight countries signed the SAARC Framework Agreement on Energy Cooperation and Electricity Trade that will boost the investment and trade, apart from a greater regional connectivity.
The deal will also ensure electricity trading through grid connectivity.
Howver, the eight countries failed to sign two pacts – one on motor vehicle and another on railways – that could have increased intra-regional connectivity to fuel trade in the South Asia.
SAARC Energy Center – based in Islamabad of Pakistan had long been doing groundwork – and SAARC energy ministers had finalised the draft framework agreement at a meeting in New Delhi on October 16-17.
The framework provisions South Asian governments to enable their agencies for grid connectivity, policy harmonisation and trading as well as facilitating the supply of electricity to power-deficit cities
The framework agreement comes into effect from today.
After the signing of the agreement of the concluding session, SAARC chair and Prime Minister Sushil Koirala announced that the two pacts which will boost connectivity and encourage people-to-people contact and movement of goods will be approved within three months.
At the end of the two-day 18th SAARC summit – which took place after three years, a 'Kathmandu Declaration' was also adopted. The 'Kathmandu Declaration' recognised that after nearly 30 years of its existence, it was time to "reinvigorate' SAARC's regional cooperation and 'revitalise' the bloc as an effective vehicle to fulfill the developmental aspirations of the people in the region.
The summit declaration also identified trade as a key area with leaders renewing their commitment to achieve South Asian Economic Union in a phase-wise and planned manner through a free trade area, a customs union, a common market, and a common economic and monetary union.
The declaration said the leaders unequivocally condemned terrorism and violent extremism in all its forms and manifestations and underlined the need for effective cooperation among the member states to combat them. The SAARC leaders also directed respective authorities to ensure full and effective implementation of the SAARC Regional Convention on Suppression of Terrorism.
Koirala also declared that the 19th SAARC Summit will be held in Islamabad of Pakistan in 2016.
The SAARC member countries – Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka – host the summit alphabetically every year, though it has been held in three years this time. The two-day SAARC Summit – started yesterday – was attended by Presidents of Afghanistan, Sri Lanka, the Maldives, and Prime Ministers of India, Pakistan, Bangladesh, Nepal and Bhutan.


Nepal to benefit
KATHMANDU: Nepal will benefit from the energy agreements among the SAARC nations. Currently, some Indian companies are giving special interest to invest in the energy sector in Nepal, but Bangladesh has also shown in joint investment in hydropower in Nepal to meet its increasing energy demand.
Investment Board of Nepal has recently signed agreements of 900-MW each Upper Karnali and Arun III hydropower projects.
According to the agreements, Nepal will get 306-MW power free of cost. Nepal will also get free shares of the Upper Karnali and Arun-III. The Arun III is going to Rs 1 billion worth shares to locals, while the country will get 27 per cent share of the Upper Karnali.
Likewise, the government is planning to invest Rs 100 billion soft loan from India in Budhigandaki Hydropower.
These projects will not only help Nepal reduce ballooning trade deficit with India, but also help meet rising energy demand in India.
Currently, India has been providing electricity to Bangladesh. India has also promised Pakistan and Afghanistan to provide 1,000 MW each soon. However, India is a net buyer of power from Bhutan, currently, as India has already signed bilateral energy trading agreements with Bangladesh and Bhutan.
September's Nepal-India Power Trade Agreement (PTA) has opened door to sell the electricity produced in Nepal to Bangladesh. But the SAARC framework agreement has expanded the opportunity to regional level.
Similarly, World bank is helping construction of Dhalkebar-Muzaffarpur Transmission Line that will help cross border connectivity. Some 1,400 MW of power can be exported and imported through the transmission line.

South Asia lags behind despite huge potential

Despite huge potential, South Asia lagged behind compared to other regional groups, according to the experts.
There is immense economic potential in the region," vice chair of National Planning Commission Prof Dr Govind Raj Pokhrel said addressing a two-day regional consultation on 'Deepening Economic Cooperation in South Asia: Expectations from the 18th SAARC Summit' here in Kathmandu today.
Stressing on improving trade facilitation to boost intra-regional trade, he also highlighted on the potential of regional energy cooperation. The recent efforts of the government to promote energy cooperation with India are indication in the right direction, which could further facilitate regional energy cooperation, he added.
The programme – being organised as a side-event to the 18th SAARC Summit to provide useful recommendations to deepen economic cooperation in South Asia – was organised by South Asia Watch on Trade, Economics and Environment (SAWTEE), National Planning Commission and Federation of Nepalese Chamber of Commerce and Industry (FNCCI), in collaboration with
German Cooperation for Development (GIZ), CUTS International, India Council for Research on International Economic Relations (ICRIER), and Friedrich Eburt Stiftung.
President of FNCCI Pradeep Jung Pandey, on the occasion, provided an account of the barriers faced by the business community in conducting trade within South Asia. He also stressed the need to go beyond trade in goods and also look as how to exploit the untapped potential of the services sector.
More important he pointed out the need for greater economic as well as people-to-people connectivity in the region, and argued that normalised trade relation between India and Pakistan is necessary for South Asian Association for Regional Cooperation (SAARC) to move forward.
Inaugurating the programme, chief guest and minister of Foreign Affairs Mahendra Bahadur Pandey said that SAARC has long dreamed of deeper regional cooperation for economic growth and prosperity and has also undertaken initiatives to facilitate trade and investment, and improve regional connectivity. "However, several constraints like financial and investment-related, largely affect the efficient implementation of trade and transport facilitation measures," he added.
Expressing hope that SAARC would undertake necessary steps to promote intra-regional investments and attract foreign direct investments (FDIs), Pandey said that through the effective implementation of the SAARC Agreement on Trade in Services (SATIS), SAARC could see higher growth in the services sector.
Most countries in the region have failed to meet the Millennium Development Goals (MDGs), he said, emphasising that the SAARC Development Goals (SDG) should be aligned with the Sustainable Development Goals in line with the post-2015 development agenda.
He also highlighted the necessity to take mitigation and adaptive measures to address the threat of climate change, which is going to impact, among others, food security of the region.
Strengthening of regional cooperation on this front is essential, he said, expressing hope that the 18th SAARC Summit would be able to send across a strong message that SAARC leaders are ready to revitalise and implement all past initiatives undertaken by SAARC to deepen regional integration.
Likewise, an independent analyst from India Major General (Retd) Ashok Mehta, on the occasion, rightly highlighted the role of track-II approach in moving forward relevant issues to track-I. He spoke about the Kathmandu Declaration signed at the 3rd SAARC Summit, and how SAARC went against its original Charter to address the issue of peacekeeping, which was viewed as a security issue and was thus beyond SAARC mandate.
He also advocated for a collective regional stance on peacekeeping issues at the UN, through the formation of a regional consultative mechanism to discuss the issue at the political, academic and field level. "It would pave the way for enhanced economic cooperation," he added.
Despite the existence of SAARC, progress in deepening regional integration has been frustratingly slow and gains have only been modest, said executive chairman of SAWTEE Dr Posh Raj Pandey speaking as the chair of inaugural session.
Therefore, what is needed to move SAARC forward is political will and sincere commitments at the highest level, he said, adding that informal trade in the region being substantially higher than formal trade is testimony of policy-induced trade barriers, which need to be overcome to make SAARC a truly economically integrated region.
Importantly, he stressed the need to reinvent the regional development paradigm with inclusiveness.
Earlier, executive director of SAWTEE Dr Hiramani Ghimire welcoming the participants said that the regional consultation is an opportunity to discuss what can realistically be done to enhance economic cooperation in South Asia, and provide recommendations for the 18th SAARC Summit.
The two-day discussion will see more than 60 participants, including researchers, policy makers, private sector representatives and media from different South Asian countries are participating in the regional consultation.
They will brain-storm on issues like trade and transport facilitation, and transit; non-tariff barriers; trade, gender and technology transfer; India-Pakistan trade relations; intra-regional investment cooperation; and regional cooperation for energy security.

ADB, Norway to help Nepal overcome crippling power shortage

Norway has pledged a grant of 360 million Norwegian kroner ($60 million) for power sector to be spent under the Sub-Regional Economic Cooperation (SASEC) Power Expansion Project.
The project’s lead donor, the Asian Development Bank (ADB), will administer the Norwegian aid.
The project aims at increasing electricity access and help overcome power shortages in Nepal besides exporting surplus power to neighbouring India by strengthening and increasing the power transmission capacity and network in the country. It is by far the largest single project support by Norway to the energy sector of Nepal, according to the ADB.
The ADB and Norwegian Ministry of Foreign Affairs signed a co-financing agreement today.
Joint secretary of the Finance Ministry Madhu Kumar Marasini and ADB country director Kenichi Yokoyama signed the grant agreement in the presence of Norwegian ambassador Pettersen at the Finance Ministry, here today.
"We believe that the project will leverage private sector investment and extend access to energy services in Nepal," said Norwegian Ambassador to Nepal Kjell Tormod Pettersen during the signing of the co-financing agreement with ADB.
"It is in line with the Norwegian development policy on energy," he said, adding that there is also a clear focus on immediate poverty reduction in the project as it supports the extension of electricity distribution lines to more than 70,000 households in the transmission corridor.
"With several new hydropower projects coming on board in the next few years, the project is crucial in developing a robust and reliable transmission network allowing transfer of power to the main load centres for domestic needs as well as giving Nepal the ability to export at least 1,200 MW of electricity to India,” said Marasini, on the occasion.
"Access to electricity is vital for Nepal’s all round development," said ADB’s country director for Nepal Kenichi Yokoyama.
"The project – a priority initiative of SASEC – will help Nepal Electricity Authority (NEA) to substantially upgrade and expand transmission and distribution lines and substations," he said, adding that it will also help Alternative  Energy Promotion Centre (AEPC) to provide electricity to rural communities with mini grid renewable energy systems.
The SASEC Power System Expansion project is expected to be completed by December 31, 2021. The renewable energy portion of the SASEC Power System Expansion project will be implemented by the AEPC and the components related to power transmission and distribution network improvement activities are to be implemented by NEA.
The grant from Norway will complement a $180 million loan from the ADB’s concessional resources of the Asian Development Fund, a loan of $120 million from the European Investment Bank, and a $11.2 million grant from the ADB-administered Strategic Climate Fund.
The project aims at increasing the mini grid-based renewable energy systems in off-grid areas and improve the management capacity of the NEA and the AEPC.
Under the power transmission and distribution capacity development component, approximately 45 km of 400 kV transmission lines and 192 km of 220 kV transmission lines along the Kali Gandaki Corridor and the Marsyangdi-Kathmandu route will be constructed.
Likewise, grid substations will be constructed, augmented and replaced in various parts of the country.
The project will strive to achieve cent per cent electrification by assisting connection to marginalised households in the new distribution corridors.

Nepal re-positions itself at the global tourism map, receives Best in Travel 2015

The world's famous travel publisher – Lonely Planet – awarded Nepal 'Best in Travel 2015' award at World Travel Market 2014 (WTM 2014) today.

Khumbu Region of Nepal has been awarded as one of the top 10 regions to travel by Lonely Planet under Best in Travel 2015 category.

The four-day long global travel and tourism exchange platform – WTM 2014 – concluded in London yesterday.

World Travel Market is the leading global event for the travel industry which caters top travel trade companies and government tourism organisations from around the world for promoting business and exchange new ideas and travel trend.

 This year Nepal’s stand at the World Travel Market 2014 was designed based on Nepali pagoda style temple having intricate wooden carvings festooned with prayer flags around the stall showcasing its nature and cultural products.

The visitors asked about nature, culture, adventure at the Nepal stall.

Nepali delegation – led by minister for Culture, Tourism and Civil Aviation Deepak Chandra Amatya – had joint secretary at the ministry Sadhu Ram Sapkota along with senior officials of Nepal Tourism Board and 12 travel trade companies.

Meanwhile, minister Amatya also attended UNWTO and World Travel Market Ministers' Summit at the World Travel Market 2014.

Participants at the UNWTO and World Travel Market Ministers' Summit stressed that 'immense synergies' between mega-events as tourism should be used to generate long-term benefits for the destinations and its people.

Speaking at the opening the Summit, UNWTO secretary general Taleb Rifai stressed on infrastructure development, investment, job-creation, involvement of local community for organising mega events.