The MoU signed between China's Three Gorges International and the government this week has reinvigorated hopes for the energy starved Nepali economy. The 750 MW installed capacity project, in which 25 per cent will be invested by the Nepali government, will help bring an end to Nepal's energy crisis.

The representatives of Three Gorges also promised to help Nepal obtain soft loans from China's Exim bank. The project, although ambitious considering Nepal's past history with big projects, offers hope specially with international reputation Three Gorges commands after it successfully completed the world's largest hydro project in China's Yangtze river during which it relocated 1.3 million people.

The other important factor that makes this project useful for the country is the generated power will entirely be for Nepal's internal consumption.

This guarantees Nepal's future energy security. However, there are other issues related to the projects like revisiting the DPR to include changes, negotiating the power purchase agreement and ensuring that the project has minimum environmental impact.

The legacy of bad energy politics, which affected projects like Arun III and Upper Karnali in the past must not be continued. An estimated 15,000 people will have to be relocated during the construction of the project.