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Under this arrangement, Nepal will export hydroelectricity to Bangladesh via Indian transmission lines.
- It underscores a broader movement towards cross-border energy cooperation in South Asia.
Initiatives for Cross-Border South Asian Energy Co-operation
- Cross-Border Electricity Trade:
- India-Bangladesh: Upcoming Electricity corridor from Katihar in Bihar to Bornagar in Assam.
- India-Nepal-Projects like Arun III, Upper Karnali hydropower projects (UKHP).
- India-Bhutan: E.g. Kurichu, Tala, Chukha and Mangdechhu.
- Energy Pipelines: TAPI Pipeline to transport natural gas, India-Bangladesh Friendship Pipeline, Motihari-Amlekhganj pipeline etc.
- Renewable Energy Cooperation: Exemplified by International Solar Alliance initiative’s Green Grids Initiative, OSOWOG etc.
Significance of Energy Co-operation
- Countering Chinese influence: China is developing energy infrastructure for importing energy from its South Asian partners.
- Economic integration: Energy trade is key enabler of regional integration.
- Other Significances: Energy Security, environmental sustainability etc.
Challenges in Energy Co-operation
- Environmental damage: Opposition of UKHP in Nepal for impacts on Himalayan environment.
- Hurdle Rates: Represents costs due to structural grid barriers between countries which needs to be factored for electricity trade.
- Other Issues: Regional Frictions (E.g. conflicts between India and Pakistan), Limited Utility of Hydropower Projects
Institutional Mechanisms For Energy Cooperation
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