The Legislature Parliament on Monday approved the Saarc Framework Agreement for Energy Cooperation.

The proposal was presented by Energy Minister Janardan Sharma for ratification on the same day.

Responding to queries raised during the discussions, Sharma said the agreement would contribute towards plans to export surplus power generated during the wet season and import during the dry season.

Foreign ministers from eight Saarc countries—Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka—had signed the agreement at the presence of their heads of state and government during the 18th SAARC Summit held in Kathmandu on November 2014.

“First we held discussions within our ministry and with other line ministries before presenting the proposal to the Parliament,” said Dinesh Kumar Ghimire, spokesperson for the Energy Ministry.

The Saarc member states have agreed to enable their agencies concerned to develop transmission interconnectivity within the region. The agreement would allow power supply from surplus countries to those with deficit.

“This agreement has opened a huge avenue for electricity trade provided we tap our immense hydropower potential,” said Ghimire. “Bangladesh has already expressed its interest to import energy from Nepal as well as invest in our hydropower projects.”

The Energy Ministry is preparing to sign a memorandum of understanding (MoU) with Bangladesh for energy-sector cooperation.

However, the Saarc framework agreement alone is not enough for effective power trading between the member states. “Every country must change its regulatory regime as per the agreement,” said Ghimire. “For example, if Nepal and Bangladesh are to conduct power trade, the transmission line has to go through India. So, India must provide some sort of support.”

However, the member countries have also agreed to gradually lift barriers, including customs duty, for enhancing the regional connectivity.

More importantly, the Article-7 of the agreement has enabled the member states to plan cross-border grid interconnections through bilateral agreements based on the needs of the trade in the foreseeable future through studies and sharing technical information required for the same.