Bhutan and Nepal, two ‘least developed countries’ that could change the face of South Asia with the power of hydroelectricity. Both countries are part of Least developed countries (LDCs) listed by UN in 2016 and are expected to graduate from the category by 2025. One of the major factor of this progress is going to hydroelectricity.
Bhutan has been an important exporter of hydroelectricity to India. Between 1997 and 2002, electricity sales to India contributed to approximately 45% of the country’s gross national revenue. This has translated, and will continue to translate, into better quality of life for the population, including access to basic services, improved health and education, and industrial and commercial developments. Hydropower has become the backbone of Bhutan’s economy. Thanks to electricity sales, Bhutan’s per capita GDP has become one of the highest in South Asia. This was US$2,580 in 2015 (equivalent to 20% of the world average), compared to US$1,615 in 2006.
According to UNCTAD report, the annual GDP growth estimated for Bhutan for 2016 is 6.4%, from 3.6% in 2013. This would not have been possible without rapid growth in industry and services, much of which has resulted from the availability of electricity. At present, Bhutan is the only country in South Asia that generates more electricity than its national needs.
Nepal could also benefit tremendously if it developed a similar scheme with its neighbour India. For this to happen, however, decades of mistrust between the two countries would have to be overcome. And this would be especially difficult given their ongoing borders tensions.
So far, Nepal has developed less than 2% of its hydropower potential. If this potential is developed sustainably in the coming decades, it could revolutionised the nation’s economy. Electricity can be sold to its energy-hungry neighbours, India and Bangladesh. Considering Nepal’s per capita income of US$689 in 2015, which equivalent to 5% of the world average, this should be a welcome opportunity.
An initiative launched within the South Asia Association for Regional Cooperation, called the BBIN (for Bangladesh, Bhutan, India and Nepal), aims at better cooperation on electricity and connectivity with India. Current discussion among these countries could lead to exciting developments for the sub-region. Additionally there is another regional co-operation forum involving China called BCIM economic corridor. If properly planned and managed – and mindful of some of the countries’ specific social and economic concerns, cooperation – it could contribute to improved quality of life, better understanding among governments and overall development in all four countries.
According to the Asia Development Bank, there’s a glimmer of hope in the region because of a number of projects. There are several cross-border electricity transmission interconnections planned or ongoing, such as the Bhutan-India additional grid reinforcement.
The India-Nepal 1,000-megawatt (MW) interconnection is already working, and Nepal is importing 80MW at 132 kilovolts from India. Other transmission links between the two countries are under construction, as well as between Bangladesh and India.
In addition, there is the proposed India-Sri Lanka high voltage direct current transmission link with a submarine cable component; and a few projects including India-Pakistan.
The capacity of each of these six transmission interconnections ranges from 250MW to 2100MW, and would cost between US$140 million to US$1000 million to construct.
An important way countries in South Asia can accelerate their economic development, and graduate from the LDC category, is by working with each other. The region has more poor people than all the countries in Sub-Sahara Africa. Their economic futures could change radically through collaboration between the countries in the region, lifting millions of people out of poverty.