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Nepal approves India's hydropower board to study, develop West Seti project

  • Category
    International Relations
  • Published
    19th Aug, 2022

Context

Nepal recently approved India's hydropower board to study and develop 1,200MW hydropower projects in western Nepal.

About

West Seti project:

  • The projects include 750MW West Seti Hydropower Project and 450MW Seti River (SR-6), a joint storage project.
  • The Nepal Investment Board (NIB) has approved a Memorandum of Understanding with Indian developer National Hydro Electric Power Corporation Pvt Ltd, a Government of India Enterprise
  • For conducting a feasibility study of the joint development of hydropower involving 750 MW West Seti Hydropower Project and 450 MW Seti River – 6 Project, a combined capacity of 1200 MW.
  • It is planned on West Seti river/basin in Seti, Nepal.

India -Nepal power relations:

  • Nepal is rich in power sources with around 6,000 rivers and an estimated potential for 83,000 MW. India has formally approached Nepal on many occasions.
  • India is viewed as a feasible market for Nepal, but there has been some uncertainty in Nepal over India’s inability to deliver projects on time. India has undertaken to harness or expressed intent to harness major rivers in the north.
  • An ambitious Mahakali treaty was signed back in 1996, to produce 6,480 MW, but India has still not been able to come out with the Detailed project Report.
  • The Upper Karnali project, for which the multinational GMR signed the contract, has not made any headway for years. 
  • West Seti, therefore, has the potential to be a defining model for Nepal India’s power relations in future.

Problems with project implementation

  • In Nepal, there has been some concern about India’s capacity to complete projects on schedule.
  • An ambitious Mahakali treaty was signed in 1996, with a capacity of 6,480 MW, but India has yet to release the Detailed Project Report.
  • The Upper Karnali project, for which the multinational GMR signed the contract, has made no headway for years.
  • One of the main reasons for the delays in these projects was a lack of agreement on a power purchase agreement with India.
  • The Himalayan Region’s seismic sensitivity is also a major consideration.
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