PTC plans co in Nepal to sell power to India, Bangladesh
Premium- Will help the government’s plans to build a South Asia-focused energy security architecture
NEW DELHI : State-owned PTC India Ltd is planning to set up a power trading company in Nepal that will supply electricity from the hydropower-rich neighbour to India and Bangladesh, said PTC India CMD Rajib K. Mishra.
In what will come as a shot in the arm for India’s energy diplomacy, this will be a first for an Indian power company in Nepal and will bolster the government’s aim to build a South Asia-focused energy security architecture.
Mishra said, in the long run, the company may sell power beyond India and Bangladesh, catering to Myanmar and Vietnam, if the required infrastructure is set up.
This company would act as an aggregator and trade power on multiple fronts, in contrast to PTC India’s mandate of trading power to and from India.
“(PTC India) board has given us an approval for starting a new trading company in Nepal. So, that’s something we have not done outside the country. We have done a lot of business with Bhutan, Bangladesh and Nepal as a trading company in India, sourcing the power from them. For the first time,we will try to have a company there in Nepal," he said.
Noting that PTC has entered into partnerships with hydropower majors SJVNL and NHPC, Mishra said that the company is also in talks with other players that can be potential sources of power generation in the northern neighbour.
“We are proposing for a joint venture company, both for the Indian public and private sector companies having an interest in the power sector of Nepal. There might be an entity from Nepal which can also be in roped as a stakeholder in the company. This is to ensure energy security and stability in the cross-border trade," he said.
The PTC CMD thinks Nepal has the potential to generate surplus power of around 5,000 MW to India in the next 3-5 years, depending on commissions of new hydro projects.
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“For the first time this year, Nepal has exported 350 MW of power during the past three-four months. This will increase going ahead. If the surplus power in Nepal needs to be brought to India and Bangladesh, there has to be an aggregator who has deep pockets and can handle 5,000 MW," Mishra said.
The CMD also said that PTC India will operate as a holding company and it will be at an arm’s length from the Nepal entity, although there will be synergy in their business.
The state-run power trading major is awaiting amendments to the law in Nepal which would give companies access to power trading. Nepal is considering the Electricity Act 2022 which is expected to bring the required changes.
“The ministry of energy, water resource and irrigation, Nepal has proposed amendment in the existing Electricity Act of Nepal which will recognize power trading as a business activity. The draft bill is pending before the Nepali parliament for approval," he said.
The plan to register a separate company in Nepal comes on the heels of PTC signing a memorandum of understanding (MoU) with NHPC for sale of power from the upcoming West Seti and Seti River-6 hydro power projects in Nepal.
The MoU was signed by former NHPC CMD A.K. Singh and Mishra.
As per the MoU, PTC shall purchase the contracted capacity from NHPC from the date of commercial operation of the projects for onward sale to state utilities, discoms and bulk consumers on a long-term basis in India and neighbouring countries.
It will also try to sell any untied capacity on medium or short-term basis or on power exchanges, as per the MoU.
rituraj.baruah@livemint.com
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