By IANS
Kathmandu : Long-standing political disputes in South Asia have proved a major barrier to the growth of an energy market, according to a World Bank study.
The demand for energy in the region is expected to grow annually in the range of 6.6 percent to 11.5 percent during the next 15 to 20 years, the study noted.
According to the study entitled “Potential and Prospects for Regional Energy Trade in the South Asia Region”, India, Pakistan, Bangladesh, Sri Lanka and Afghanistan have energy demand growth far exceeding domestic supply.
Others like Bhutan and Nepal have more energy resources than they need.
Yet, the level of cross-border energy trade is very low and the national gas and electricity networks are largely isolated from each other.
Significant electricity trade exists only between India and Bhutan.
There are no gas pipelines crossing national borders of any South Asian country, the study pointed out.
Besides political feuds, the other barriers to a stronger energy trade are lack of cross-border transmission links; the presence of bottlenecks in the domestic energy infrastructure and poor operational efficiency, financial performance and creditworthiness of the utilities.
The report says that energy exports could make dramatically significant contribution to the GDP growth of economies like Bhutan and Nepal.
There are also important environmental benefits from increasing regional energy trade.
This is especially relevant for India, which relies very heavily on domestic coal. Imported hydropower and natural gas would help in moderating the environmental impact of new generating plants that India needs to build.
“South Asia’s strong economic growth has translated into rapidly increasing energy demand and this growth is becoming constrained by significant shortages in energy supply,” said Alastair McKechnie, World Bank Director for Regional Programs in South Asia.