Diplomacyindia.com

Kathmandu, May 28  Nepal and India have discussed setting up an energy bank to address power shortages in times of crisis.

Nepal on Friday proposed the idea at a meeting of the India-Nepal Joint Standing Committee, a bilateral mechanism on water resources, power and irrigation projects, the Kathmandu Post reported.

Both countries have discussed the idea earlier, but this was the first time that Nepal made a formal proposal.

Through the energy bank set-up Nepal would export electricity to India during the summer season and import power from India in winter, when output drops sharply resulting in crippling power shortages.

The Power Trade Agreement signed by Nepal and India in 2014 during Prime Minister Narendra Modi’s visit to Kathmandu has opened the way for to establish an energy bank.

“The concept of an energy bank is clear: We export to India when our production exceeds domestic consumption and import during the times of crisis,” said Mukesh Raj Kafle, managing director of the Nepal Electricity Authority.

India agreed to the concept, but there was no open access due to legal complications.

“The proposal is good, but we have to clear a number of regulatory provisions. We will start to work on it,” he quoted Indian officials as saying.

According to Nepali officials, it depends on India’s willingness to accept the idea.

Nepali officials also requested India to resume production from the 15 mw Gandak powerhouse. The plant was constructed as per the Gandak Agreement.

They requested New Delhi to build the Birpur powerhouse as soon as possible.

The two sides also discussed the construction of roads on the border.

India raised the issue of security at the border areas, and Nepal has pledged to address its concerns. The two sides also assessed the ongoing irrigation projects.

The meeting was the first official engagement between the two countries after the cancellation of President Bidya Devi Bhandari’s visit to India and recalling of Nepal’s ambassador Deep Kumar Upadhyay.