The SAARC Energy Ring was envisioned by the SAARC Leaders at the 12th SAARC Summit in Islamabad, Pakistan in 2004, as the way forward in energy cooperation in South Asia in the areas of electricity, oil and gas, renewable energy and technology transfer. This was reiterated by the SAARC leaders at their 16th Summit in Thimphu, Bhutan in 2010, calling for enhanced cooperation in the energy sector to facilitate energy trade, and to develop efficient conventional and renewable energy sources including hydropower.

The objective of the council is to pave the way for initiating regional power trade through the implementation of SAARC framework agreement. Apart from the infrastructure and regional power trading, the council will function to provide an enabling regulatory environment for realising the SAARC energy ring.
The council also focuses on defining the appropriate roles and responsibilities and required performance of electricity regulators in South Asia in overseeing the development of cross-border power trading in South Asia. The council will serve as the regional forum to discuss, interact, share knowledge and experiences and achieve consensus on harmonised rules and regulations across various areas that will enable bilateral and multilateral power trade.
Representatives from the SAARC countries, Government of Sri Lanka, Government of Afghanistan, Government of Pakistan, Government of the Republic of Maldives, Government of Nepal, Royal Government of Bhutan and Government of the Peoples Republic of Bangladesh participated in the meeting.
The eight South Asian nations (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka) collectively account for over one-fourth of the world’s population and the region is one of the fastest growing economies in the world, with an average annual growth rate of 6.8% as measured by GDP per capita world bank data says.