Nepal has signed a deal with an Indian company NHPC for construction of a hydroelectric plant in the country’s western region, reported Reuters, citing officials.

The Himalayan country claims its rivers to have the potential to produce more than 42GW of hydroelectric power.

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It opened its rivers to overseas players in a move to boost its economy and export electricity to reduce the trade deficit of over $13bn.

NHPC signed a memorandum of understanding (MOU) for two projects – West Seti (750MW) and SR 6 (450MW).

As part of the MoU, NHPC will study details, such as possibility, environmental impact, inundation of land and building costs for the two projects.

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Both the plants will be situated on the West Seti River, which is in the far western region and also, the least developed place in Nepal.

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Chinese hydropower developer Three Gorges International was earlier picked up to build the West Seti plant.

However, the Chinese firm scrapped the deal in 2017 over issues regarding the terms.

State-run Investment Board Nepal chief executive officer Sushil Bhatta told Reuters: “After decades of delays we would not have plunged into another uncertainty.

“NHPC has a good track record of developing such projects in similar terrain in neighbouring areas in India and has the potential to ensure India’s market for electricity,”

India is also building a 900MW hydropower project on the Arun River in east Nepal at a cost of $1.04bn.

At present, Nepal produces about 2GW, or less than 5% of its total hydroelectric potential, because of insufficient funds and technical expertise.
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Image: Both plants are to be situated on the West Seti River in Nepal’s far western region. Credit: Mike from Pixabay.