ndian regulations a jolt for would-be electricity exporters from Nepal

Electricity export to the Indian market will be difficult, as the southern neighbour has introduced stringent regulation on cross-border electricity trade.

The regulation issued by Central Electricity Regulatory Commission for Nepal, Bangladesh, Bhutan and Myanmar seeks INR 10 million per megawatt as bank guarantee to utilise India’s transmission network and only those hydropower projects with capacity to generate 50 megawatts and above will be granted grid connectivity to export electricity to the Indian market.

The regulation was introduced based on the ‘Guidelines on Cross Border Trade of Electricity’ issued by India’s Ministry of Power in December that provides preferential treatment to projects with Indian investment and those with government investment of the concerned countries.

As per the regulation, companies fully owned by the governments of the concerned countries and those having 51 per cent equity investment of Indian public and private companies can export power to the Indian market after obtaining one-time approval from the designated authority in India. However, power generators who do not fulfil the above mentioned criteria but want to participate in cross-border trade of electricity shall be eligible to obtain approval only on a case-by-case basis.

Nepali power developers say it will be difficult to export electricity to India, as the regulation introduces strict rules for private sector projects. After signing the power trade agreement with India in 2014, Nepali hydel developers were eyeing the power-hungry northern part of India to export electricity.

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