FNCCI seeks parties’ commitment for hydropower development



    The Federation of Nepalese Chambers of Commerce and Industry ( FNCCI ) has sought commitment from the political parties to prioritise sustainable hydropower development.

    The apex private sector body has also demanded formation of a high-level taskforce which reviews country’s hydropower implementation approach and reports to the Prime Minister. “The taskforce would review all recent recommendations for hydropower development, assess progress and prepare an updated implementation programme,” states the draft Hydropower Development Strategy for Nepal prepared by the FNCCI .

    The draft strategy is expected to become the basis for the FNCCIto initiate discussions with the political leaders, industries, and donor agencies, among others, and reach a consensus for the development of the hydropower sector.

    Under the short-term vision for the resolution of the ongoing power crisis, the strategy paper talks about operation of thermal plants by the private sector rather than the government. It has asked for a special (higher) power tariff to facilitate the short-term supply of power produced by thermal plants.

    “Industries are likely to accept higher tariff than the inconvenience of load shedding and high cost of their own backup systems,” says the paper that has been submitted to the Prime Minister, Energy Ministry, leaders of major political parties, donor agencies and other stakeholders.

    According to FNCCI , operation of thermal plants would minimise the effect of any delays in the construction of new transmission lines. The Nepal Electricity Authority (NEA) should also be ready to purchase the energy generated from privately-run thermal plants ‘in case of excess production’.

    The private sector has been expressing interest to supply the energy produced by captive power plants based in industries. According to industrialists, those captive plants could generate a combined 150MW of electricity. FNCCI President Suraj Vaidya said the strategy paper aims to determine short- and long-term energy development measures. “The paper also aims at the overall development of the energy sector and prevent the existing anomalies in this sector,” said Vaidya.

    Given the Investment Board provides its services to investors of hydro projects above 500MW only, the strategy paper has suggested that the board should consider the size of the projects. “A reduction in the project size could help expedite more projects.” In order to make things easier for mega projects that need to export power to India, the strategy paper has asked the government to finalise the Power Trading Agreement (PTA) with India. The federation has also asked the government to hold negotiations with India to halt the commodity tax imposed by the Indian government on power export from Nepal.

    As per the strategy paper, the government should terminate the power generation licence of those who are not developing projects.

    “The survey licence should be extended only if projects are making significant progress.”

    The strategy paper also talks about establishing an independent group responsible for developing the country’s power market. The group will consider the roles and the timing of the establishment of National Electricity Regulator, National Power System Operator and Planner, Transmission Development and Management Entity, National Generation Entity and Distribution and Retail Supply Entity.

    Source : The Kathmandu Post