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West Seti Power Project

Context:

India will be taking over an ambitious hydropower project in Nepal — West Seti — nearly four years after China withdrew from it, ending a six-year engagement between 2012 and 2018.

Relevance:

GS II- India & Its Neighborhood – Relations

Dimensions of the Article:

  1. What is West Seti Hydel Project?
  2. Power Relations Between India and Nepal: Importance
  3. Problems with project implementation
  4. India-Nepal Ties

What is West Seti Hydel Project?

  • The West Seti Dam is a proposed 750-megawatt (MW) hydroelectric dam on the Seti River in Nepal’s Far-Western Development Region, primarily as a storage scheme to generate and export large amounts of electrical energy to India.
  • The project is expected to provide Nepal with 31.9 percent free electricity.
  • Locals who are impacted by the project will also receive a part of Nepali Rs 10 million, as well as 30 free units of electricity per month.

Power Relations Between India and Nepal: Importance

  • Nepal has a large number of power sources, with over 6,000 rivers and an estimated capacity of 83,000 MW.
  • India has made numerous formal approaches to Nepal, requesting preferential access to Nepali waters if it can match bids from other countries.
  • India is seen as a viable power market for Nepal, and the country has committed to or stated its intention to harness important rivers in the north.

Problems with project implementation

  • In Nepal, there has been some concern about India’s capacity to complete projects on schedule.
  • An ambitious Mahakali treaty was signed in 1996, with a capacity of 6,480 MW, but India has yet to release the Detailed Project Report.
  • The Upper Karnali project, for which the multinational GMR signed the contract, has made no headway for years.
  • One of the main reasons for the delays in these projects was a lack of agreement on a power purchase agreement with India.
  • The Himalayan Region’s seismic sensitivity is also a major consideration.

Benefits for Nepal

  • Nepal has a massive power shortfall as it generates only around 900 MW against an installed capacity of nearly 2,000 MW.
  • Although it is currently selling 364 MW power to India, it has over the years importing from India.

India-Nepal Ties:

  • Nepal is an important neighbour of India and occupies special significance in its foreign policy because of the geographic, historical, cultural and economic linkages/ties that span centuries.
  • There has been a long tradition of free movement of people across the open border.
  • Nepal shares a border of over 1850 km with five Indian states – Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.
  • The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.
  • Nepalese citizens avail facilities and opportunities on par with Indian citizens in accordance with the provisions of the Treaty. 
  • Nearly 8 million Nepalese citizens live and work in India.

Connectivity and Development Partnership between India and Nepal:

  • Government of India’s development assistance to Nepal is a broad-based programme focusing on creation of infrastructure at the grass-roots level, under which various projects have been implemented in the areas of infrastructure, health, water resources, education and rural & community development.
  • In recent years, India has been assisting Nepal in
    • development of border infrastructure through upgradation of 10 roads in the Terai area
    • development of cross-border rail links at Jogbani-Biratnagar, Jaynagar-Bardibas 
    • establishment of Integrated Check Posts at Birgunj, Biratnagar, Bhairahawa, and Nepalgunj.
    • The total economic assistance earmarked under ‘Aid to Nepal’ budget in FY 2019-20 was INR 1200 crore.
  • Apart from grant assistance, Government of India has extended Lines of Credit of USD 1.65 billion for undertaking development of infrastructure, including post-earthquake reconstruction projects.
  • In April 2018, the ‘India-Nepal New Partnership in Agriculture’ was launched with a focus on collaborative projects in agricultural research, development and education.

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September 2022
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