The NHPC-backed Phukot Karnali Hydropower Project, Nepal Supreme Court’s order on free electricity allocation, and expansion of India-Nepal cross-border power trade are expected to dominate bilateral energy talks in Pokhara, alongside discussions on transmission lines, renewable energy and green hydrogen cooperation.
Key Highlights
- Nepal and India will hold high-level energy talks in Pokhara on July 14-15.
- The Supreme Court order on NHPC’s Phukot Karnali project is likely to feature prominently.
- Both countries will review cross-border transmission projects and electricity trade.
- Renewable energy and green hydrogen cooperation will also be key agenda items.
New Delhi, July 13: India and Nepal are set to review key bilateral energy initiatives during the 13th Joint Working Group (JWG) and Joint Steering Committee (JSC) meetings in Pokhara, with the NHPC-promoted Phukot Karnali Hydropower Project expected to be among the most closely watched agenda items. The two-day discussions will focus on hydropower development, cross-border electricity trade and long-term energy cooperation.
A major issue likely to receive attention is the Nepal Supreme Court’s directive asking the government to revise the Memorandum of Understanding (MoU) for the 480 MW Phukot Karnali Hydropower Project. The court has directed authorities to increase Nepal’s share of free electricity, currently fixed at 21.9%, in proportion to the country’s investment in the project. The order has raised concerns over the project’s commercial viability.
NHPC Limited has expressed reservations about implementing the court’s decision, stating that the revised terms could affect the project’s financial sustainability. At the same time, Nepal Vidyut Utpadan Company Limited has urged the Nepal government to seek a review of the verdict, placing Kathmandu in a delicate position between safeguarding national interests and ensuring continued foreign investment in the hydropower sector.
Beyond the Phukot Karnali project, both sides will review the progress of cross-border transmission infrastructure, including the New Butwal-Gorakhpur and Dhalkebar-Sitamarhi 400 kV transmission lines, which are currently under construction. They will also assess the implementation of the Inaruwa-Purnea and Dododhara-Bareilly 400 kV transmission corridors, targeted for completion by 2030, enabling Nepal to export an additional 5,000 MW of electricity to India.
The meetings will also evaluate progress under the India-Nepal long-term power trade agreement signed in January 2024, under which India agreed in principle to import up to 10,000 MW of electricity from Nepal over the next decade. At present, Nepal exports around 1,000 MW of electricity to India during the monsoon season, making the timely expansion of transmission infrastructure crucial for achieving future export targets.
In addition, officials will discuss renewable energy cooperation, green hydrogen development and the expansion of bilateral electricity markets. The growing partnership reflects the strategic importance of energy cooperation in strengthening regional connectivity, supporting clean energy transitions and enhancing energy security for both countries.
Conclusion
The upcoming Nepal-India energy dialogue is expected to shape the future of bilateral hydropower cooperation, cross-border electricity trade and clean energy partnerships while addressing key policy challenges surrounding the NHPC-led Phukot Karnali project.
