India to promote sub-regional energy hub

 India is planning to promote a sub-regional energy hub.

"The sub regional energy hub comprising of Bhutan, Bangladesh, Nepal, Myanmar and India will help meet its energy needs," according to foreign secretary of India Harsh Vardhan Shringla, delivering his remarks during the inauguration of the South Asia Group on Energy at the Research and Information System for Developing Countries in New Delhi today.

India is taking the lead to promote a regional approach to meet its energy needs, the Indian foreign secretary said, adding that it is natural for India to be the epicentre for any energy initiative in the region as it is the largest producer and consumer of energy in the region. "We have to make energy affordable, accessible and clean," he said, adding that India is promoting easier movement of hydrocarbons across the region.

Shringla, on the occasion, also mentioned that the the first South Asian cross-border petroleum products pipeline from Motihari in India to Amlekhgunj in Nepal was remotely inaugurated by Indian and Nepali prime ministers in September 2019. "The pipeline has helped save Indian Rs 1 billion for Nepal Oil Corporation."

India is now expanding the project to Chitwan, and also construct a new pipeline connecting Silguri and Jhapa in Nepal," he added.

Likewise, India supplied some 700 MW of power to Nepal in 2019 through more than 25 transmission interconnections, Shringla informed, hoping that Nepal may also start exporting power in the near future. "The first high capacity cross-border power transmission line, from Dhalkebar in Nepal to Muzaffarpur in India has been completed with Government of India-assistance and was upgraded to 400 KV capacity in November 2020."

"More cross-border high-capacity connections are envisaged," he added.

In the power generation sector, Satluj Jal Vidyut Nigam Ltd (SJVNL) is developing the 900 MW Arun-III hydroelectric project in northeast Nepal, the Indian foreign secretary said, recalling the Lower Arun project of Nepal has recently been awarded to SJVNL. "A consortium led by GMR is developing the 900 MW Upper Karnali hydroelectric project in western Nepal." 

Upper Karnali is an export-oriented project, where power is to be supplied to India and Bangladesh. "Private sector participation in the hydropower sector holds enormous promise," he said, mentioning that there is a wide variation in energy resource endowments and energy demand in the region. "While India and Bangladesh account for the major natural gas and coal resources, Bhutan and Nepal have large hydropower resources, and Sri Lanka has great potential for solar and wind power production."

All the South Asian countries, in fact, have vast renewable energy potential. "By harnessing complementarities in electricity demand, load curves and resource endowments, a mutually beneficial model of cooperation in South Asia could be developed," he said.

Arun-III to ink financial closure

The SJVN Arun-III Power Development Company is soon signing financial closure.
The company has almost finalised the necessary documents for the financial closure, residential representative of SJVN Arun-III Power Development Company Hareram Subedi said, adding that the company has already forwarded the necessary documents to Investment Board Nepal (IBN) for its final approval. “After it gives a green signal, the company will ink the financial closure with IBN by February,”
SJVN – a subsidiary company of Satluj Jal Vidyut Nigam Ltd of India, which has been tasked with building the project – has however, completed around 30 per cent of construction work of 900-megawatt (MW) Arun-III hydroelectric project.
 Investment Board Nepal is meanwhile discussing with the central bank before granting approval. “
Arun-III – an export-based project, which will bring the largest-ever government-to-government level foreign direct investment (FDI) from India worth $1.2 billion – has signed investment pledge with Everest Bank (Rs 10.5 billion) and Nabil Bank (Rs 5 billion).
The SJVN Arun-III Power Development Company said that they have accelerated the civil, hydromechanical and electromechanical works simultaneously. It has awarded civil works to an Indian firm called JP Construction, which has already started executing the construction work.
The board and SJVN had signed an agreement in November 2014 for the power development agreement of Arun-III hydropower project that is supposed to start generating energy by 2020 according to earlier agreement. But the board and SJVN reached an agreement later to complete the construction of the project by 2023.
Nepal will get Rs 330 billion as royalty in a period of 20 years and the project will also provide 21.9 per cent of the generated energy free of cost, apart from shares to locals and free energy to the affected areas. The project will generate 400 million units of power every year.

Korean company to set up assembly plant in Nepal

Investment Board of Nepal (IBN) today approved foreign investment of Rs 10.54 billion for a South Korean company Motrex Co Ltd.
The 35th meeting of the IBN chaired by Prime Minister KP Sharma Oli has approved the investment for the Vehicle Manufacturing and Assembly Plant proposed by Motrex Cp Ltd, according to a press note from the board.
The South Korean company is engaged mainly in the manufacturing and distribution of automotive parts. The company’s products include audio-visual navigation (AVN), audio video (AV), around view monitor, head up display and rear seat entertainment (RSE).
According to the board, the South Korean company is planning to assemble four-wheelers in Nepal.
Likewise, the meeting also decided to extend the term of the SJVN Arun-III Power Development Company Pvt Ltd – the developer of Arun-III hydropower – till July 30 for its financial closure.
According to the board, SJVN Arun-III Power Development Company Pvt Ltd (SAPDC) – a fully-owned subsidiary of the Indian government’s Satluj Jal Vidyut Nigam Limited (SJVNL) – will now have to complete financial closure for the 900-MW hydro-power project by June 30. Earlier in November 2017, the board had decided to extend the deadline by six months, to arrange funds. The project has recently received the transmission license. It has already taken forward its construction work which has helped the board to decide to extend the deadline for the financial closure of the Indian company.

Sutlej offers to sell 10 per cent power to Nepal

The Indian power developer Sutlej is proprosing to sell 10 per cent of the energy – available for export from mush-awaited Arun III Hydropower Project – to Nepal.
SJVN Arun III Power Development Company wrote – last week – to Investment Board Nepal (IBN) asking if the Nepal government would be willing to buy 10 per cent of the total energy available for export.
According to the project development agreement (PDA) signed between SJVN and the board, Nepal will receive 21.9 per cent of the total energy generated by the project free of cost while the developer has rights over the rest of the output. The agreement also requires the developer to offer 10 per cent of the electricity from its share to Nepal on commercial terms.
"As we have secured a market for 90 per cent of our share of the energy, we have sent a proposal to board asking if the Nepal government would be interested in buying the rest of the electricity as provisioned in the PDA,” said resident representative of SJVN in Nepal Hari Ram Subedi.
The board has forwarded Sutlej proposal to Nepal Electricity Authority (NEA), the sole buyer of electricity in the country.
The NEA – confirming that the government power utility has received the proposal – said that it will ask Sutlej to clearly mention the terms and conditions and the tariff rate. "If Sutlej quotes a reasonable rate, the NEA will purchase the electricity from Arun III," informed the NEA.
The Indian developer of the export-oriented 900 MW plant located in eastern Nepal is carrying out work on the construction site of the Arun III plant on a war footing after Nepali and Indian Prime Ministers jointly laid the foundation stone for the project remotely this May during Indian Prime Minister Narendra Modi’s Nepal visit.
According to the board, Nepal will receive Rs 348 billion over 25 years from the project. The project developer will also provide 21.9 per cent of the energy free of cost, which is worth Rs 155 billion, plus another Rs 107 billion in royalties.

Cabinet approves $37 million World Bank loan for cross border transmission line

The government today approved a $37-million World Bank (WB) loan for a cross border power transmission and trade project with Southern neighbour.

“Finance minister Shanker Prasad Koirala is going to sign the agreement with the World Bank soon,” informed government spokesperson and Home Minister Madhav Poudel after the cabinet meeting here today evening.

The Nepal-India Electricity Transmission and Trade Project (NIETTP) that aims at establishing cross-border transmission line around about 1,000 MW capacity will facilitate power trade between Nepal and India. The project will also help increase the supply of electricity in Nepal as it can import 100 MW from India for the current need.

India's IL&FS, Energy Development Company, Power Grid Corporation of India and SJVN, India – formerly Satluj Jal Vidyut Nigam Ltd (SJVNL) incorporated on May 24, 1988 as a joint venture between Government of India and Government of Himachal Pradesh – are the shareholders of Cross Border Power Transmission Company Ltd (CPTC).

“Nepal and India will able to trade power through dedicated lines after the completion of the projects,” Poudel said, adding that the country is reeling under scheduled power due to lack of enough transmission lines that has made import and export of power impossible. “Nepal has not been able to import power from India, at present to meet the domestic demand.”

The project aims at at least two transmission corridors between Dhalkebar-Muzaffarpur and Hetuda-Dhalkebar-Duhabi between Nepal and India.

The first corridor will have 90-km of 400-kv double circuit transmission line between Muzaffarpur and Sursand on the Indian border with Nepal and another 40-km of 400-kv double ciruct transmission line between Dhalkebar and Birtamod on the Nepal border with India.

The second component of the project is is Hetuda-Dhalkebar-Duhabi transmission line and grid synchronisation; and installation of properly tuned power stystem stabilisers in major power generating stations in both the countries.

India has – though the EXIM Bank of India – also injected $160 million loan for a 220-KVA Koshi corridor transmission line, 132-KVA Solu corridor transmission line and 32-MW Rahughat hydropower project, under construction to help Nepal export power and also for the domestic consumption.

The manufacturing sector is suffering due to lack of power making the domestic products less compeititve and blocking the economic growth of the country that has a huge potential of the hydropower development.,

Earlier, the World Bank had approved a $99 million loan for a cross border transmission energy cooperation to mitigate the energy crisis.