Nepal and India have agreed to expand cooperation in the power and energy sector under the BBIN (Bangladesh, Bhutan, India and Nepal) framework. BBIN is known as a sub-regional grouping of SAARC, or the South Asian Association for Regional Cooperation.

An initiative by India, the BBIN sub-regional architecture works in such areas as water resource management, and connectivity of power, transport, and infrastructure.

The vision statement is a major outcome of the visit of Prime Minister Sher Bahadur Deuba to India. Earlier on Saturday, during a joint press briefing with Deuba, Indian Prime Minister Narendra Modi hailed the vision statement.

According to the Nepal-India joint vision statement on power sector cooperation unveiled on Saturday after the delegation talks between Prime Minister Sher Bahadur Deuba and his Indian counterpart Modi in New Delhi, there are unprecedented opportunities for expanding and further strengthening mutually beneficial cooperation in the power sector where both sides can work together in several areas.

According to the vision statement, both sides will work on joint development of power generation projects in Nepal and cross-border transmission infrastructure.

Nepal and India also agreed on bi-directional power trade with appropriate access to electricity markets in both countries based on mutual benefits, market demand and applicable domestic regulations of each country and will coordinate on operation of the national grids and institutional sharing of latest operational information, technology and know-how.

“Such cooperation to include their partner countries under the BBIN framework is subject to mutually agreed terms and conditions between all involved parties. Based on their respective national policies and climate-change commitments, to make renewable energy production, hydropower in particular, a cornerstone of their energy partnership,” the vision paper reads.

During the delegation-level talks, both prime ministers noted the positive developments in each other's power sectors. India congratulated Nepal on its significant progress in the power sector including becoming a near power surplus country.

The joint vision in power sector development is a new agreement between Nepal and India as the issue of water sharing and harnessing Nepal's abundant water resources has always been placed high on the agenda of high-level visits.

“Indian investment in Nepal's renewable power sector, in particular the hydropower sector, has the potential to benefit both the countries by strengthening their economies, generating employment, enhancing export earnings and contributing to further development of industrial and financial capacities, and mutually agreed sharing of other benefits,” the statement added.

According to the paper, Nepal has invited Indian companies to invest in the development, construction and operation of viable renewable power projects, including in the hydropower sector through mutually beneficial partnerships.

Deuba and Modi also discussed expediting joint power projects like Pancheshwar Multipurpose Project, which is part of the Mahakali Treaty signed between the two sides in 1996. But both sides have failed to develop a detailed project report in the last 26 years.

Recognising the immense benefits for the people of both countries from the Pancheshwar project, the two prime ministers directed their officials to expedite bilateral discussions towards early finalisation of the project’s DPR, the vision paper said.

Both prime ministers agreed to prioritise expeditious movement on projects and initiatives on the basis of this joint vision, the statement said.

“Prime Minister Deuba appreciated India's recent cross-border electricity trade regulations that have enabled key partners like Nepal to access India's market and trade power with India,” the statement added.