Energy cooperation in South Asia

Participants	Volume
India- Bhutan power trade	5,620 GWh The present installed capacity is at 1,500 MW, of which approximately 350 MW are used for Bhutanese domestic consumption. The government of India has agreed to import a minimum of 10,000 MW by 2020. Such an increase will demand for a significant increase in transmission capacity through either AC or HVDC.
India-Nepal power trade	Annual 100-150 MW import from India
India-Bangladesh diesel	100,000 tons (2008) import from India
India-Nepal and Indi-Bhutan petroleum products	Nepal and Bhutan do not have refining capacities. Nepal imports 1.2 million ton (MT) per annum with annual increase by 20 percent from the Indian Oil Corporation. Bhutan imports 63,875 metric tons per annum
India-Bangladesh coal	3-4 million tons of coal import from India

Source: Olivia Gippner’s forthcoming discussion paper (to be published by SAWTEE)

Nepal being the most promising producer of hydropower actually imports it from India, who is seeking loads of power import to fuel its growth engine. Despite huge demand, both domestically and abroad, why is hydropower sector been such a slacker in Nepal? Blame political instability, bureaucratic hurdle, red tape, corruption, monopolistic market, and labor dispute, among others.

Nepali stakeholders identified the following as key obstacles to regional cooperation.

• Political instability
• Lack of economic argument (demand for energy)
• India’s preference of bilateralism
• NEA and Nepali policy-makers’ incapacity
• Lack of trust on all levels
• Electricity is not seen as a commodity
• Politics in the power sector