New Delhi: A World Bank report has called for energy trade within the SAARC region for overcoming power shortages in South Asia.
The FICCI-World Bank paper points out that broadly, there are two geographic clusters centred around India and Pakistan, the countries with significant energy import needs.
While Bangladesh, Bhutan, India, Nepal and Sri Lanka form the Eastern Cluster, Afghanistan, Pakistan and India form the Western.
India and Pakistan could serve as pillars of regional integration in the Eastern and Western clusters respectively, with subsequent firmer integration of the two clusters into a region-wide integrated energy market, the report says.
The paper points out that electricity and natural gas importing countries should promote sector reforms aimed at making the importing energy sector entities financially solvent and creditworthy trading partners.
Reforms should also encourage internal trade within the countries and enable evolution of the market price signals for the exporters, it notes.The exporting countries, it says, should ensure a stable and attractive investment environment, as well as stable supply to domestic markets to mitigate the risk of energy exports being diverted for domestic consumption.
Establishing and strengthening transparent, fair and stable sector regulation in both groups would also benefit regional energy trade, it said.The paper emphasises the need of investment in cross-country and export-oriented power plants and gas wells also.