Nepal and India want to work together to create a hydroelectric project in Nepal that they had originally intended to do independently.
At least three Nepali government representatives have confirmed to India Narrative that the two nations have agreed to work together to construct the 683 MW Sunkoshi 3 hydropower project, making it a trilateral undertaking.

The development of this project, which is situated near the boundary of the Ramachhap and Kavrepalanchok districts in central Nepal, has been discussed between Nepal and Bangladesh for a long time. During the sixth meeting of the Joint Steering Committee on Energy Cooperation between Nepal and Bangladesh, held on May 15–16 in Patuakhali, Bangladesh, two nations came to this accord. During the meeting, two nations decided to ask India to join them in a joint venture to construct the project, according to Prabal Adhikari, the power trade director at Nepal Electricity Authority (NEA), the nation’s state-owned power company.

The two nations resolved to construct the project by signing a joint venture agreement between the NEA and Bangladesh Power Development Board (BPDB) within the next six months at the conference.

“Before a joint venture agreement is signed, two sides agreed to make efforts to bring India on board to develop the project under trilateral cooperation,” said Adhikari, who was also a member of the Nepalese team. If India agrees to participate, a trilateral joint venture deal may be inked.

According to the Department of Electricity Development, which awards survey and construction licenses for power projects, the feasibility study and environment impact assessment (EIA) for the planned project have already been completed.

The project is now under the control of the government of Nepal, and after the creation of a joint venture business, it will need to get a survey license from the government, according to a department official.

Nepal and Bangladesh decided to leave the door open for the neighboring behemoth to join in at a later date, even if New Delhi delayed its decision to join as a joint venture partner. In such a scenario, Dirghayu Kumar Shrestha, head of the NEA’s transmission directorate and a member of the Nepali delegation, said that Nepal and Bangladesh would first sign a joint venture agreement with a clause that would allow India to join later as an equity investor.

The Sunkoshi-3 project was originally offered to Dhaka by Kathmandu, according to officials from Nepal, who also explained how the participation of Indian corporations in the project’s development would make it easier to transmit electricity from Nepal to Bangladesh through Indian territory.

As long as it is not certain that India would let Bangladesh to import electricity produced by this project, Bangladesh is likely to be less eager to invest in the project, according to Adhikari.

Before submitting the proposal to the Bangladeshi side, the Nepalese government had lengthy discussions on the issue among its different energy-related agencies, according to authorities.

The discussion of India’s participation in the Sunkoshi-3 project also took into account the fact that New Delhi has shown a desire to encourage connectivity within the Bangladesh, Bhutan, India, and Nepal (BBIN) network.

The two nations agreed to broaden collaboration in the power sector and include partner nations within the BBIN framework, according to the Joint Vision Statement on Power Sector collaboration between Nepal and India released in April of last year. However, a meeting of the three nations to explore trilateral cooperation in the electricity sector has not yet taken place.

To further collaboration in the electricity sector, “the Bangladeshi side notified us that it had reached an agreement in principle with India to formulate a trilateral mechanism including with Nepal,” said Adhikari.

At a time when all three nations are pushing for renewable energy, discussions on trilateral cooperation in the energy industry are taking place. For instance, Nepal hopes to meet 15% of its overall energy needs by 2030 via the use of hydropower and other renewable energy sources. Similar to this, the Indian government has set an ambitious goal to build 500 GW of renewable energy by 2030 in order to usher in a green revolution in the nation. By 2041, Bangladesh likewise aims to produce 40% of its power from renewable sources.

Additionally, there’s a chance that three parties will soon provide a case study of trilateral collaboration in the electricity sector. New Delhi has promised to make it easier for Nepal to export 40 MW of its electricity to Bangladesh during Nepali Prime Minister Pushpa Kamal Dahal’s May 31–June 3 visit to India. The Nepali embassy in New Delhi issued a press release following a meeting between Prime Minister Pushpa Kamal Dahal of Nepal and his counterpart, Prime Minister Narendra Modi of India, on June 1. “The Prime Minister of Nepal welcomed the decision of India to facilitate the first trilateral power transaction from Nepal to Bangladesh, through Indian grid, with an export of 40 MW of power,” the statement read.

“Both parties committed to enhancing sub-regional cooperation, including in the energy sector.”

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