The institution, Deutsche Investitions-und Entwicklungsgesellschaft mbH, or DEG, is a member of KfW Bankengruppe (KfW banking group).
"As part of our regional focus we are interested in establishing and partnering with new hydro power projects in Nepal that could export to India," Turan Caglayan, head of new business in Asia at DEG said on Tuesday. "To this end, we have been talking to Nepalese and Indian companies that have had experience in producing and transmitting power."
Caglayan did not want to name the companies involved as the talks are in preliminary stages.
"Though Nepal (too) has a power deficit now, it (DEG’s plans) is a highly feasible proposition because the potential to generate hydro power in Nepal is much higher than it is in India," said an analyst at a domestic broking firm, preferring anonymity. "If these projects materialize, Nepal will be in a position to bridge its own deficit and have excess power to export."
But Nepal cannot finance a project on its own, said Anish De, chief executive officer of Mercados EMI, an energy consulting firm. "It needs external sources, and this could be a mutually beneficial partnership."
Nepal has installed capacity of 689 MW and in dry (winter) season the production is half the capacity. The current demand is about 800 MW but generation is merely 250 MW, said Sher Singh Bhat, chief of Systems Operations, Nepal Electricity Aothority (NEA).
The existing deficit is likely to increase as most hydropower projects in the pipeline are behind schedule. Nepal is facing a planned power-cut of 16 hours everyday.
On the other hand, India requires 109,809 MW of power between April and January, but only 94,634 MW is available, according to a data on India´s Central Electricity Authority’s website.
The newspaper also said the Indian government is already working towards promoting partnerships between the Indian and Nepali power sectors.
PTC India Ltd, a government-initiated public-private partnership, had signed a memorandum of understanding with the NEA in November to export 60 MW of power from India to Nepal, apart from the 50-60 MW it already exports. The Indian government also allowed PTC India to pick a 30% stake in the newly formed Power Trading Corporation of Nepal.
The PTC India has also offered to provide Nepal 500 MW of power in 18 months at IRs 3 (NRs 4.80).
Besides, the government has been monitoring the progress of the 170 km power transmission line being set up by Infrastructure Leasing and Financial Services Ltd and the NEA between Dhalkebar near Janakpur, Nepal and Muzzafarpur in Bihar in India. This is to facilitate the import of power by India from Nepal by 2012-13.
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