Enhancing regional development through negotiation

Thursday, 30 January, 2020

Energy and water are critical to the economic development of Nepal, the success of which is highly dependent on win-win transboundary water agreements between India and Nepal, and intra-regional energy agreements which incentivise investment in energy security. This understanding prompted the Government of Nepal to highlight capacity development in water and energy negotiation as a priority initiative, at the Nepal-Australia Joint Advisory Committee on Water Resources Management.

On behalf of the Australian Government, together with the Nepalese Water and Energy Commission Secretariat, ICE WaRM delivered a four-day training programme, 16-20 January 2020, to thirty senior and mid-level managers from across the Nepal Government. The programme was designed to improve understandings in energy markets and trade and develop negotiation skills that address bilateral issues across the water and energy sector. The negotiation training also considered regional demand forecasts for the Bangladesh, Bhutan, India and Nepal (BBIN) Region, and the mechanics of operating in a transboundary energy market.

“Participants gained a heightened appreciation of the negotiation process and the preparation required for effective negotiation,” said Dr Ian Reid, ICE WaRM Chief Academic Officer.

“The programme also provided a useful insight into key concepts behind the operations of modern energy markets and the participants valued the detailed knowledge shared about the current and future situation of the electricity demand in the BBIN region.”

Recent agreements between India and Nepal and India and Bangladesh have been established with an intent to enable cross jurisdictional energy trade between the three nations. Mr Vernon Swanepoel, a former manager of wholesale energy transactions with Tas-Hydro, was invited to provide insight into energy trade negotiations based on the Australian experience. Australian experience indicates that solar has quickly become the cheapest form of energy, but as with wind, there is a need for a grid stability which hydro-power is able to provide, replacing thermal (coal) power.

The Nepal Secretary of Ministry of Energy, Water Resources and Irrigation, Mr Dinesh Ghimire, provided a keynote presentation on the current state of Bilateral and Regional Trade. Mr Saumitra Neupane, Executive Director, Policy Entrepreneurs Inc, who has in cooperation with The Asia Foundation on behalf of the Australian Government, conducted a major review of energy trading and regional dynamics, especially in relation to Nepal and India.

There is extensive potential for energy production in Nepal through hydropower, however there are also many considerations regarding water management and energy market engagement which the Government of Nepal will be facing in the near future. The Australian experience was seen as extremely valuable due to its role as a valued advisor, and the training participants agreed that the programme raised these issues and assisted them in thinking through their implications and potential future actions.