Won’t Buy Energy if More Dams Go to China: Modi to Tell Nepal PM

India will use Nepal PM’s upcoming visit to deliver a message to China.

Nepalese Prime Minister KP Oli (left) and Indian Prime Minister Narendra Modi during the former’s visit to India. 

(Photo Courtesy: Twitter/@narendramodi)

India will use Nepalese Prime Minister KP Oli’s three-day visit to not only strengthen ties with the Himalayan nation, but also to issue a strong message to neighbouring China.

According to a report in The Indian Express, Modi is expected to make it clear to Oli that if he awards more dam-based projects to China, India will not be buying energy produced by Nepal.

You can’t expect India to buy power from a Chinese-built project. Let Nepal take Chinese assistance to build those dams and let China buy back the power produced from there.

A senior government official told <i>The Indian Express</i>

A major bone of contention between India and China, the report mentions, is the $2.5-billion Budhi Gandaki project, which is situated in the Budhi Gandaki river in central-western Nepal.

The project was initially given to China last year, when former Prime Minister Pushpa Kamal Dahal had decided to join China’s Belt and Road Initiative. However, it was soon cancelled by her successor Sher Bahadur Deuba, who said that it had been concluded in an “irregular and thoughtless manner”.

The report mentions that Oli was now determined to revive the project and according to the South China Morning Post, he said:

Political prejudice or pressure from rival companies may have been instrumental in scrapping the project. But for us, hydropower is a main focus and come what may, we will revive the Budhi Gandaki project.

KP Oli told <i>South China Morning Post</i>

The reason for Oli’s insistence seems to be due to the fact that Nepal’s import of highly expensive petroleum from India takes a toll on the country’s finances and it thus needs to develop hydropower as a cheaper alternative to the former.

The report says that Modi and Oli are expected to come to an agreement regarding the foundation stone of the $1.5 billion, 900 MW Arun III hydro-electric project in the Sankhuwasabha district of eastern Nepal, during the latter’s three-day visit.

This could turn out to be a tricky feat for Nepal, the report adds, considering that it would be difficult for it to build electricity transmission lines along a rocky terrain on the China-Nepal border, with doubts arising whether the electricity generated would even be carried back to Tibetan or other Chinese towns.

(With inputs from The Indian Express)