Hydropower and India-Nepal ties

07 Nov 2022 Hydropower and India-Nepal ties

Significance for Prelims: Seti River; MoU between India-Nepal on West Seti and Seti River (SR6) projects.

Significance for Mains: Joint Hydro-Power Projects between India and Nepal and their significance.

News: India’s involvement in the West Seti and Seti River (SR6) storage project shall enhance cross-border power exchanges.

Timeline of the development of West Seti and Seti River (SR6) projects:

• In the early 1980s, the 750MW West Seti Hydroelectric Project started as a 37 MW run-of-the-river scheme. France’s Sogreah received the license to develop the project. It proposed the scheme without building a dam in its pre-feasibility study in 1987.
• In the 1990s, Australia’s Snowy Mountains Engineering Corporation (SMEC) acquired a majority stake in the project.  
• Between 1997-2011, Investment and environmental concerns affected the progress of projects. 
• In 2009, China National Machinery and Equipment Import and Export Corporation stepped in the project ,but withdrew citing a poor investment environment.
• In 2011, Nepal handed the project to China.
• China’s Three Gorges International Corporation was assigned to develop the project in 2012.
• Due to issues of resettlement and rehabilitation, China’s Three Gorges International Corporation withdrew from the project in 2018.
• Nepal’s effort to develop the project by mobilising internal resources led to further delays and increased costs. 
• Recently, a Memorandum of Understanding (MoU) was signed between the Investment Board Nepal and India’s National Hydroelectric Power Corporation (NHPC) Limited to develop the West Seti and Seti River (SR6) joint storage project (1,200 MW).

Potential of the project in enhancing India-Nepal ties:

• Completion of the project on time will give India much-needed leverage in future hydropower cooperation.A decision to involve India is a sign that Nepal is reposing its faith in India to complete the project.
• MoU will minimise the geopolitical influence of China in Nepal as the West Seti Hydroelectric Project was a major Chinese venture under the Belt and Road Initiative.
• India can firm its presence in Nepal with this project India will get involved in the fourth hydropower project along with  Mahakali Treaty (6,480 MW), the Upper Karnali Project (900 MW) and the Arun Three projects (900 MW) in western and eastern Nepal. 
• The project can enhance cross-border power exchanges between the two countries. Since the project has an estimated potential of 83,000 MW,  Nepal can export electricity and earn foreign exchange. 
• India will get a new alternative to address the power deficit: In recent years,  India faced a severe deficit in coal-based thermal power plants. So, the West Seti Hydroelectric Project can provide an added alternative and viable way to address power deficits to meet the growing energy demand. 

Way Forward: 

• Careful study of investment scenarios: For successful completion of the projects few options and alternatives need to be explored particularly a conducive investment environment, distribution and transmission network and cost of resettlement and rehabilitation, at the preliminary stage.
• Extension of the project to other bilateral and regional levels: Bangladesh-Bhutan-India-Nepal (BBIN) framework for cross-border energy cooperation can be used to harness the potential of this project. 
• Creation of cross-border energy market: Hydropower potential in Nepal and Bhutan and Northeast India can be optimally operationalised. 

Further readings:

1. Bangladesh-Bhutan-India-Nepal (BBIN) framework
2. Mahakali Treaty 
3. Upper Karnali Project
4. Arun Three projects

Source: The Hindu

Article: Energising India-Nepal ties, the hydropower way (Mukesh Kumar Srivastava)

Article Link: https://www.thehindu.com/opinion/op-ed/energising-india-nepal-ties-the-hydropower-way/article65943114.ece 

Yojna IAS Daily current affairs eng med 7th November

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