Nepal's economy could boost from power trade with India: Study

Power trade with India will boost Nepal's economic growth manifold while providing New Delhi with cheap imported electricity, according to a study published by US Agency for International Development (USAID).
"With accelerated power trade between India and Nepal, Nepal's gross domestic product could reach NPR 13,100 billion (over USD 120 billion) in 2045, which is 39 per cent more than with existing trading mechanisms," said the report entitled 'Economic Benefits from Nepal-India Electricity Trade' released here today.
The report was jointly released by Michael Gonzales, senior US diplomat at the US Embassy in Nepal and Swarnim Wagle, Member, National Planning Commission, Nepal.

The report analysed the potential of cross-border electricity trade (CBET) between Nepal and India, and its feasibility and impact on the economy, power systems and power infrastructure of both countries.
A first of its kind, the study was carried out by the Integrated Research and Action for Development (IRADe) under the fourth phase of the South Asia Regional Initiative for Energy Integration (SARI/EI) Programme under the USAID funding.
Highlighting the key findings from the report, Kirit Parikh, Chairman, IRADe, said: "This growth in GDP is driven in part by the three-fold increase from NPR 310 billion in 2030 to NPR 1,069 billion in 2045 in revenue earned from electricity trade.

"Moreover, increased power trade will also fuel Nepal's per capita electricity demand to jump from the current 139 kWh/year to 1,500 kWh/year by 2045. Per capita electricity demand reflects strongly on the Human Development Index of a country as increased access to electricity is directly linked to better quality of life."
Speaking at the report launch, acting chief of US mission in Nepal, Gonzales said, "Asia is the fastest growing region in the world but lacks reliable power infrastructure. With optimum utilisation of resources and a coherent regulatory framework in place, better regional integration could be achieved through CBET.
"For India, the benefits are more in terms of lower electricity system costs due to electricity imports from Nepal," the report concluded, adding "additionally, the import of hydropower electricity from Nepal will reduce the carbon emissions of the power sector in India as the country's electricity generation is largely coal-based.