Experts on Sunday during SAARC Business Leaders Conclave at Kathmandu held the view that cross-border energy cooperation could play a vital role in South Asian region for the larger economic integration of the region.
They urged the government to formulate enabling policy and private sector to increase investment for energy cooperation in the region
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Speaking at a plenary session titled ‘Regional Integration and Energy Cooperation’, Alaina B Teplitz, the ambassador of the United States to Nepal hailed several developments in recent years, saying they have underlined the region’s commitment to energy cooperation.
“The development includes SAARC framework agreement on energy cooperation, power trade agreement between Nepal and India and bilateral framework between India and Bangladesh and India and Bhutan,” Teplitz said. “Existing power trade in the region has demonstrated win-win benefits for all South Asian countries and provides a strong foundation for accelerating regional power trade.”
Teplitz cited the example of Bhutan which has achieved significant prosperity via hydro electricity trading. She said Bhutan’s surplus hydropower exports to India account for 25 percent of its GDP. In another example she explained how Bangladesh is eliminating power cuts and reducing cost of energy by importing energy from India. “South Asia is moving along the path of energy cooperation and the next step is to coordinate regional energy regulations and policies,” she said.
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The cross border electricity trade in the South Asian region is estimated at just over 2000 MW annually. India is importing around 1400 MW of hydroelectricity from Bhutan while Bangladesh and Nepal are importing 500 MW and 400 MW from India annually.
A 2017 study report by USAID-funded South Asian Regional Initiative for Energy Integration (SARI/EI) which was unveiled in the conclave showed that the trade volume will be doubled by 2020.
The same study showed that accelerated power trade between India and Nepal could increase Nepal’s GDP by over $120 billion in the next 30 years and without this energy trade, the growth rate would be 39 percent lower.
The SAARC Business Leader Conclave 2018 has brought together the region’s economic and business leaders and policy makers of South Asia on a common platform to discuss debate and create solutions and opportunities to take the region on the path of shared prosperity through economic integration. The conclave is hosting various plenary sessions with experts from sectors like energy, tourism, digital finance and agriculture among others.