Indian Prime Minister, Narendra Modi will visit Bhutan on Sunday, 15 June 2014. Bhutan is Modi’s first destination abroad after assuming office. He is expected to hold talks with his Bhutanese counterpart Tshering Tobgay, meet with the Bhutanese royal family and is also likely to address Bhutan’s parliament. Among other key discussions, energy will be on top of Modi’s agenda. Amit Bhandari, energy and environment fellow at Gateway House, comments on the importance of sustaining energy ties with Bhutan and exploring a similar relationship with Nepal.
Statement:
“Power trade between India and Bhutan has created a mutually beneficial economic relationship, which is bolstered by friendly relations between the two countries. Bhutan has been able to develop 1,420 megawatt (mw) of hydropower plants with India’s help and another 2,940 mw are under construction. Electricity (to India) is Bhutan’s single largest export. Modi’s visit to Bhutan demonstrates the importance India places on furthering this relationship.
Bhutan has the potential to generate 24,000 mw of hydropower. It is in India’s interests to help Bhutan develop this potential – India can improve its energy security in the long term by purchasing clean, renewable energy from a politically stable and friendly neighbour.
Another neighbouring country which has tremendous potential to generate hydropower – 43,000 mw of it – is Nepal. However, hydropower projects have long gestation periods and require substantial investment which Nepal has been unable to generate due to its sluggish economy and political instability.
By providing financial assistance to Nepal for hydropower projects and negotiating power purchase agreements to buy the surplus generated post-completion, India can further diversify its energy sources. Large-scale electricity exports to India will help power Nepal’s economy and improve relations between the two countries.”
For more information or interview requests, please contact Reetika Joshi at joshi.reetika@gatewayhouse.in.