India Assures Nepal of Hydropower Development Support

16 May 2022

India Prime Minister Narendra Modi undertook an official visit to Lumbini, Nepal, on 16 May 2022, at the invitation of Nepal Prime Minister Sher Bahadur Deuba. The official press release noted that this was Prime Minister Modi’s fifth visit to Nepal and his first to Lumbini in his official capacity. The Indian Prime Minister’s visit to Lumbini “emphasizes the deep and rich civilizational connect between India and Nepal and the contribution of people on both sides to foster and promote it.” His visit coincided with the occasion of Buddha Purnima.

Their bilateral meeting discussed further strengthening cooperation in various sectors, including energy, connectivity, trade, economy, development partnership, and culture. They also discussed air connectivity.

On energy cooperation, the two Prime Ministers expressed satisfaction at the progress made in bilateral power sector cooperation in recent months. This includes development of generation projects, power transmission infrastructure and power trade.

Prime Minister Deuba invited companies from India to undertake the development of West Seti hydropower project in Nepal.

Prime Minister Modi assured India’s support in the development of Nepal’s hydropower sector. He noted that India will encourage interested developers to explore new projects.

A Memorandum of Understanding (MoU) was also signed by SJVN Ltd and Nepal Electricity Authority (NEA) for the development of the 490 megawatt Arun-4 hydropower project in Nepal, in the presence of Prime Minister Modi and Prime Minister Deuba. SJVN noted that this will be the third mega project to be constructed by the company in Nepa, following the 900 MW Arun-3 project and the 669 MW Lower Arun project. This brings the total capacity of 2,059 MW in Nepal. Mr. Nand Lal Sharma, SJVN Chairman and Managing Director, shared that SJVN’s target is to have 5,000 MW projects in Nepal by 2030.

A total of six MoUs/ Agreement were signed and exchanged in the presence of the two leaders. These are as follows:

  • Memorandum of Understanding between Indian Council of Cultural Relations (ICCR) and Lumbini Buddhist University on the establishment of Dr. Ambedkar Chair for Buddhist Studies
  • Memorandum of Understanding between ICCR and CNAS, Tribhuvan University on the establishment of ICCR Chair of Indian Studies
  • Memorandum of Understanding between ICCR and Kathmandu University (KU) on the establishment of the ICCR Chair of Indian Studies
  • Memorandum of Understanding [in collaboration] between KU, Nepal and Indian Institute of Technology Madras (IIT-M), India
  • Letter of Agreement (LoA) between Kathmandu University (KU), Nepal and Indian Institute of Technology (IITM), India [For Joint degree program at Master’s level]
  • Agreement between SJVN Ltd and Nepal Electricity Authority (NEA) for Development and implementation of Arun 4 Project

On 2 April, India Prime Minister Narendra Modi and Nepal Prime Minister Sher Bahadur Deuba held bilateral talks in New Delhi, focusing on power sector cooperation between India and Nepal. Nepal Prime Minister Deuba lauded India for its enabling cross-border electricity trade regulations that have made it easier for key partners including Nepal to access India's energy market and engage in power trade. They also noted the potential to expand energy cooperation to include their neighbors in the subregion under the Bangladesh-Bhutan-India-Nepal (BBIN) framework.


Request for Increased Air Connectivity

In addition to discussions on energy cooperation, Nepal Prime Minister Sher Bahadur Deuba also requested India for additional air routes between India and the Nepal cities of Mahendranagar, Nepalgunj, and Janakpur. Increased flight routes will help further facilitate connectivity and travel between the two countries.
Nepal recently opened its second international airport, the Gautam Buddha International Airport (GBIA), on 16 May.

ADB supported the Government of Nepal in upgrading and building the GBIA.


Related links

Press release

List of documents

PM Modi Nepal Visit Highlights: India-Nepal relations are unshakeable like the Himalayas, says PM Modi

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