The signing of a key investment agreement between Hydroelectricity Investment and Development Company Limited (HIDCL) and India’s National Hydroelectric Power Corporation (NHPC) for the joint development of the West Seti and Seti River-6 (SR-6) hydropower projects was postponed at the final stage.
The memorandum of understanding (MoU), which would have seen HIDCL take up to a 10% equity stake in both projects, was scheduled to be signed during the two-day official visit of India’s Minister of Power, Manohar Lal Khattar, to Nepal. The initial MoU outlining cooperation on the joint development of the projects was signed in July 2020.
Although Nepal and India reached a broader agreement Tuesday, April 22 to build two major 400 kV cross-border transmission lines, the specific MoU regarding the West Seti and SR-6 projects remained unsigned. According to HIDCL sources, the signing was set but called off at the last minute.
“We had completed all the necessary preparations after a series of informal consultations with our Indian counterparts. But at around 5 PM on Tuesday, the Indian side informed us that the MoU would not be signed during Minister Khattar’s visit,” people privy to the matter told Aarthik Abhiyan, a sister publication of New Business Age, on condition of anonymity. They, however, emphasized that the delay did not stem from any fundamental differences between the two state-run companies.
The West Seti project, a reservoir-based plant, is designed to generate 750 MW of electricity, while the SR-6 project aims to produce 450 MW. Both projects are part of Nepal’s efforts to expand its hydropower generation capacity and export surplus electricity.
The groundwork for these projects has already been laid. On August 18, 2022, Nepal’s Investment Board signed an agreement with NHPC to issue a survey license for the preparation of a Detailed Project Report (DPR). The license, granted in October that year, required NHPC to submit the final DPR within two years. A draft was submitted in July 2024.
Sandip Kumar Dev, spokesperson for the Ministry of Energy, Water Resources, and Irrigation, also confirmed that while preparations were in place for the MoU, it was deferred at the last moment.
Adding another layer of complexity, NHPC—despite previously committing to provide over 21% of the generated electricity to Nepal free of charge—has reportedly been pushing to amend this clause, which could become a contentious issue in upcoming negotiations.
