The SAARC Framework Agreement on Energy Cooperation for a common grid to share power was signed in presence of leaders of the eight member states Thursday, the last day of the 18th SAARC Summit at Kathmandu.

Earlier, Nepal’s Foreign minister Mahendra Bahadur Pandey told Reuters that the deal will allow creating a seamless electricity grid.

The agreement is expected to lead to greater cooperation in the power sector, besides improving power availability in the region, Sumon Mahbub, travelling with Prime Minister Sheikh Hasina, says from the Nepalese capital.

After the signing ceremony, Nepalese Prime Minister Sushil Koirala said the foreign ministers would sit again within next three months to discuss the SAARC agreements on motor vehicles and railway service.

The summit at the opening session had sought the signing of two pacts on road and rail connectivity besides the regional electricity agreement.

Pakistan was blocking the deals citing the lack of internal processes being in place, according to analysts.

But on Thursday, it agreed on the pact after a retreat of South Asian leaders at Dhulikhel, 20 kilometres off Kathmandu, they said.

Sources at SAARC Secretariat confirmed that the deal, which had hit snags earlier, was the outcome of an unscheduled meeting between Indian Prime Minister Narendra Modi and Pakistani Prime Minister Nawaz Sharif during the retreat.

Meanwhile, the next SAARC Summit will be held in the Pakistani capital of Islamabad in 2016, chair of the 18th Summit Koirala announced it at the concluding session. ”

He thanked Pakistan for offering to host the next summit.

Later, Nawaz Sharif thanked the leaders to choose Islamabad.