Sri Lanka and Nepal to discuss energy trade

• 2 years ago (2022-05-30)
• David Flin

Asia 892 Hydropower 131 Transmission 191

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Foreign ministers from Nepal and Sri Lanka are meeting to discuss possible energy sales from Nepal to Sri Lanka.

Sri Lanka has faced routine power outages since March when it failed to make payments on diesel shipments. Sri Lanka has borrowed heavily, including from China, to which it owes 15 per cent of its national debt. Nepal has hydropower reserves and exported 39 MW to India in 2021.

Nepal generates 90 per cent of its energy consumption from hydroelectric power. By contrast, hydroelectric power accounts for 20 per cent of electricity generation in Sri Lanka, and over 70 per of its generation comes from thermal sources built by Chinese companies.

These discussions will focus on a specific energy trade agreement. Experts have suggested that more such agreements might be developed in the future to relieve Sri Lanka’s energy issues and reduce its dependence on China.