World Bank has released a study under the title 'How would cross-border electricity trade stimulate hydropower development in South Asia?' to show how electricity trade can promote hydropower in South Asia which consists of developing countries like India, Pakistan, Sri Lanka and more.
This study examines the importance of enhancing the cross-border transmission interconnections and regional electricity trade to promote hydropower in the South Asia region and quantifies the potential of hydropower development and trade under alternative scenarios.
This study shows that development of regional electricity markets through expanded cross-border transmission interconnections and regional electricity trade agreements is needed to benefit the region from the exploitation of the untapped hydropower resources.
It also finds that development of hydropower in the region would increase by 2.7 times over the next two decades if the region could facilitate an unconstrained flow of electricity across the borders in South Asia. If a moderate carbon tax is added on top of that, hydropower capacity in 2040 could be more than three times as high as the current level.