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Indian prime minister offers Nepal $1 billion in credit, double electricity supply

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    Indian Prime Minister Narendra Modi, second right, receives flowers from his Nepalese counterpart Sushil Koirala, after he arrived at the Tribhuwan International Airport in Katmandu, Nepal, Sunday, Aug. 3, 2014. Modi flew to the neighboring Himalayan nation Sunday to meet top leaders, offer prayers at a revered Hindu temple and address the parliament. (AP Photo/Niranjan Shrestha) (The Associated Press)

  • 1f1ba8b602b97410VgnVCM200000d6c1a8c0____-Nepal India-2.jpg

    Indian Prime Minister Narendra Modi, center, arrives at the Tribhuwan international airport in Katmandu, Nepal, Sunday, Aug. 3, 2014. Modi flew to the neighboring Himalayan nation Sunday to meet top leaders, offer prayers at a revered Hindu temple and address the parliament. (AP Photo/Niranjan Shrestha) (The Associated Press)

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    Indian Prime Minister Narendra Modi, shakes hands with Nepalese Army chief Gaurav Shumsher Rana, left as he stands with his Nepalese counterpart Sushil Koirala, third right, upon arrival at the Tribhuwan International Airport in Katmandu, Nepal, Sunday, Aug. 3, 2014. Modi flew to the neighboring Himalayan nation Sunday to meet top leaders, offer prayers at a revered Hindu temple and address the parliament. (AP Photo/Niranjan Shrestha) (The Associated Press)

  • 1f1ba8b602b97410VgnVCM200000d6c1a8c0____-Nepal India-4.jpg

    Indian Prime Minister Narendra Modi, center, waves to the media as he comes out after a meeting with his Nepalese counterpart Sushil Koirala, at the prime minister's office in Katmandu, Nepal, Sunday, Aug. 3, 2014. Modi flew to the neighboring Himalayan nation Sunday to meet top leaders, offer prayers at a revered Hindu temple and address the parliament. (AP Photo/Niranjan Shrestha) (The Associated Press)

Indian Prime Minister Narendra Modi announced Sunday a $1 billion concessional line of credit for Nepal to use for development, including building hydropower plants in the energy-starved Himalayan nation.

Modi told Nepal's parliament that the financial assistance could be used for hydropower development and building other infrastructure. He also said he plans to double the electricity that India is supplying to Nepal, and that new transmission lines will soon be built to allow the country to import more power.

Nepal has suffered from major power shortages, with consumers facing power cuts of up to 12 hours a day because power plants are able to meet only half the total demand. Nepal's communist insurgency, which lasted until 2006, and ensuing political instability have hampered the construction of new power plants, and the country cannot afford to map out an energy strategy on its own.

Modi also said that once the power plants are built, India would buy electricity from Nepal.

"Right now our electricity will remove Nepal's darkness, but in a decade electricity from Nepal will remove India's darkness," Modi told Nepalese lawmakers.

Modi arrived in Nepal on Sunday to meet with top leaders, offer prayers at a revered Hindu temple and address parliament.

His visit is significant because India has major influence over both the economy and politics in the much smaller Himalayan nation, and supplies all of Nepal's oil needs and dominates much of its trade.

Modi, who took over as India's leader in May, met with Nepalese Prime Minister Sushil Koirala and plans to meet with President Ram Baran Yadav on Monday before returning home.