AGREEMENT BETWEEN
HIS MAJESTY'S GOVERNMENT OF NEPAL AND
THE GOVERNMENT OF INDIA
CONCERNING THE ELECTRIC POWER TRADE

WHEREAS, His majesty's Government of Nepal (hereinafter referred to as "HMGN" ) and the Government of India (hereinafter referred to as "GOI") desire to further promote and strengthen the friendly relations existing between them,
WHEREAS, both HMGN and GOI have adopted the policy of economic liberalization with the intention to promote participation of private sector also in the development of their respective countries,
WHEREAS, both HMGN and GOI have emphasized quicker and enhanced development of the power sector though participation of local and foreign private investors also, in the power industry of their respective countries.
WHEREAS, both HMGN and GOI, envisage the development of a number of power projects within the foreseeable future in their respective countries and
WHEREAS, both HMGN and GOI, in view of the upcoming power projects in their respective countries, have held mutual discussions and have reached an understanding that this Agreement shall facilitate the process of electric power trade between the two countries.

NOW, WHEREAS, HMGN and GOI HAVW AGEWWS AS FOLLOWS

ARTICLE – 1

Any party, in Nepal or India, may enter into an agreement for power trade between Nepal and India irrespective of such parties being Governmental, semi - Governmental or private enterprise.

ARTICLE – 2

The parties entering into such an agreement for power trade, may determine the terms and conditions of such an agreement including the quantum and parameters of supply, the points of delivery and the price of supply of electrical power to be traded between them.

ARTICLE – 3

The parties entering into such an agreement for power trade shall be afforded all necessary assistance by respective Governments, in accordance with the laws and regulations of respective countries for conduct of surveys including field investigations and for construction, installation, operation and maintenance of facilities required for generation and transmission of power in the territories of both the countries, required for such power trading.

ARTICLE – 4

The parties entering into such agreement for power trade, shall be granted all the incentives and concessions by respective Governments, available under relevant laws and regulations of respective countries, for generation and transmission of power.

ARTICLE – 5

The parties entering into such an agreement for power trade, shall fulfil all necessary requirements stipulated in relevant laws and regulations of respective countries as well as comply with necessary technical requirements of each country.

ARTICLE – 6

Notwithstanding anything contained herein, both HMGN and GOI may enter into separate arrangements between themselves or with third countries on power trading for the benefits of their respective countries.

ARTICLE – 7

Any difference regarding interpretation and application of this Agreement shall be resolved by mutual consultation between the two Governments.

ARTICLE – 8

This Agreement shall be subject to ratification and shall enter into force on the date of exchange of instruments of ratification. it shall remain valid for a period of fifty (50) years from the date of its entry into force and its validity shall be extended by mutual consent.

ARTICLE – 9

The provisions of this Agreement shall be reviewed at ten (10) years interval or earlier as required by cither Government and amended, if required, by mutual consent.

Initialled at Mumbai, India, on this seventeenth day of February, NINETEEN HUNDRED AND NINETY - SIX in two (2) original copies in English language

On behalf of On behalf of

(Dr. D. N. Dhungel) Secretary
Ministry of Water Resources
His Majesty's Government of Nepal
  (P. Abraham)Secretary
Ministry of Power
The Government of IndiaSd