The government of Nepal is seeking to increase the amount of power it can exchange with India, Reuters reports. The government has asked India to raise the ceiling to 150 MW.
Under the current arrangements, based on a 25 year accord, the two countries can exchange up to 50 MW. The Nepalese Electricity Authority said that the increased ceiling will help with both the import and export of power.
Nepal is expecting to experience a serious electricity shortage for two years, until the Kali Gandaki A hydropower project begins to generate power. The 144 MW project is being built in west Nepal. It is being jointly funded by the Asian Development Bank and the Japanese government.
Nepal has faced the prospect of disruption to its power supply since the World Bank withdrew support for the Arun III project. This plant would have met the expected growth in demand during the late 1990s. The country now has a generating capacity of 300 MW and a peak demand for 330 MW.
However Nepal is rich in hydropower resources, with a potential of 83 000 MW. Under a deal signed between India and Nepal in 1996, a 6400 MW development on the Mahakali river in Nepal will supply power to both India and Nepal. Nepal expects to earn valuable revenue from the export of power. It is rated today as one of the ten poorest countries in the world.