Paraguay, Bhutan and Nepal: Landlocked but Hydropower Rich Cases of the Lame duck, Flying Goose and Sitting Duck!

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Paraguay has 5.6 million people, Bhutan has 0.6 million and Nepal has 27 million, all small land locked countries with rich hydropower potential. The 12,600 MW Itaipu Project commissioned on Paraguay-Brazil border river, Parana, was the world’s largest hydropower plant until China’s Three Gorges superseded it in 2007. Paraguay’s share, half of Itaipu’s generation, is on average of about 44,000 million units annually with over 90% sold to Brazil. Nepal’s projected average annual generation from three major multipurpose projects, at Sapta Koshi, Karnali Chisapani and Pancheshwar’s 50%, totals about the same. Despite two decades of such large volume of power export, however, Paraguay remains the second poorest country in South America. Nepal, with a tiny 550 MW of hydropower capacity, is undergoing bouts of load shedding and is mired in controversies. Bhutan, with a mere export of about 1,300 MW, comprising 60% of the national revenue, has therefore been strongly recommended as the model for Nepal to replicate. If India is to maintain her 9% GDP growth rate then she will require 785,000 MW (6 times the present installed capacity) of power by 2026/27. Along with this demand for power, she will also need huge quantities of additional freshwater. While there are options for power, there are none for water. All large or small storage projects in Nepal augment water to the rivers flowing down to India. So far India’s policy has been to obtain this augmented water through Nepal’s default. Nepal needs to seriously consider why Paraguay, despite its huge export, is a lame duck while Bhutan with a tiny export is a flying goose!Key words: Power export, Karnali Chisapani, Pancheshwar, Sapta Koshi, Nepal-India Water Resources negotiations,Nepal’s default, Paraguay, Bhutandoi: 10.3126/hn.v3i0.1895Hydro Nepal: Journal of Water, Energy and Environment Issue No. 3, January, 2008 Page 4-8

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... India also offered preferential treatment to Nepalese exports in 1971 and in subsequent treaties of 1991, 1993, 1996, 2002 and 2009, tariff and other duty concessions to Nepalese exports were offered. India has also been involved in infrastructural development in Nepalin building dams, roads, highways and railway projects (Pun 2008;Taneja and Chowdhury 2010). ...
Foreign policies of landlocked states have been a topic of interest for scholarship on international relations but the landlocked states in South Asia have received negligible attention. Due to their geographical realities, South Asian landlocked states that include Afghanistan, Bhutan and Nepal, depend on their neighbours for trade with the outside world. A range of factors place landlocked states in an unequal relationship with their coastal neighbours. While these factors include the superiority of coastal neighbours in terms of economy, population size, and military strength, we argue that their landlockedness plays a crucial role. To further investigate the role of landlockedness, this study compares the foreign policy decisions that guide India-Nepal and Afghanistan–Pakistan relations. Based on the assessment of historical, economic and geopolitical factors, we argue that India and Pakistan exploit their landlocked neighbours to achieve their national interests. Frustrated by the treatment of their coastal neighbours and the presence of new trade opportunities have compelled Afghanistan to use its closeness with India to counter over-dependence on Pakistan and Nepal has enhanced cooperation with China to overcome its reliance on India, thereby creating a new geopolitical dynamic within South Asia.
... There are examples around the world which portray that selling hydropower, mainly by hydro-rich but economically weak nations, would not necessarily lead to prosperity. The Paraguay's hydropower export is one of the typical example where Paraguay alone is the main electricity exporter in South America but is still the second poorest nation in the region (Pun, 2008;Thanju and Canese, 2011). Similarly, Bhutan, a hydropower rich country like Nepal, exports major share of its hydroelectricity to India at nominal rates. ...
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Nepal, with abundant hydropower potential and situated in a geo-politically important place, has the opportunity for cross-border electricity trade. The paper argues that for Nepal, the trade of electricity with neighboring countries of India and China is of both strategic and financial importance. This is because, even if Nepal develops all the potential hydroelectricity and export to neighbors, the contribution of such export will also be insignificant to them where the installed capacity have already crossed hundreds of thousands megawatts. In such backdrops, the paper attempts to explore the major opportunities and challenges of cross-border trade of electricity for Nepal. The paper delves into Nepal's existing plans, policies and regarding which, the paper urges for serious consideration in formulating or implementing them. Presenting the current status of bilateral and multilateral agreements and institutional arrangements, the paper reinforces the fact that cross-border electricity trade is not an easy task. Nevertheless, with prioritization of fulfilling internal demands, it is high time for Nepal to address the existing challenges and grab the opportunities offered by cross-border electricity trade. For this, the paper entails for the development of national strategy in lieu of considering electricity as trade commodity only.
... Inferences can be drawn from other hydro-rich but economically weak nations who have sold electricity but not been able to improve their conditions. Paraguay's hydroelectricity export is one of the typical examples where Paraguay alone is the main electricity exporter in South America but is still the second poorest nation in the region (Pun, 2008b;Thanju and Canese, 2011). Similarly, the ever cited example for Nepal is the Bhutanese Model of hydroelectricity generation. ...
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p>Despite the ‘immense’ water resources available, Nepal has not been able to transform this abundance of water resources into desired economic growth and societal welfare. This paper attempts to analyze the reasons for such incessant challenges that loom over water resources development in Nepal. This paper finds that it is not the resource that limits the development of water resources, but the approaches and wishes that are framed on the foundation of persistent myths. Analyzing those myths, this paper highlights the realities in water resources management of Nepal, and suggests that without dismantling the existing myths, the sustainable development of water resources seems limited. HYDRO Nepal Journal Journal of Water, Energy and Environment Issue: 23 Year: 2018</p
... The relationship with India in water resources sharing, however, has not been smooth at any time in the past. The treaty of Peace and Friendship in 1950, the 1954 Koshi River and 1959 Gandak River Agreements are highly controversial in Nepal [34]. Unilateral construction of the Girijapur barrage on the Karnali river, the Tanakpur barrage on the Mahakali river and the Laxmanpur barrage on the Rapti river are also taken as a hostile Indian attitude. ...
This paper provides an overview of a 100 year history of hydropower in Nepal. The importance of hydropower in Nepal is highlighted and major issues that the country has to consider for the development of hydropower have been analysed in detail. It is the only resource available to generate electricity, both for large export projects and small village mini grid projects in almost any part of the country. The challenges of demand and supply fluctuations, mainly due to the seasonal fluctuation of river discharges, are also described. An analysis of river flow trends shows that the impact of river flow has to be analysed river by river, as the trends are not consistent throughout the country. The social and organisational issues and their relationship with the political stability in the country have also been discussed.
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