Government has allocated Rs. 121.97 billion for the energy and irrigation sector


May 31, 2021

Kathmandu: Finance Minister Bishnu Poudel on Saturday unveiled a budget of Rs 1.647 trillion (Rs 1,647,570,000,000) for the upcoming fiscal year 2021/22. He has expressed commitment to effectively implement the budget for the next fiscal year, which begins in mid-July.

Finance Minister has allocated a total budget of 121.97 billion for Energy Sector. The special priority has been given to the construction of semi- reservoir and reservoir projects. The government has targeted to connect 1621 MW electricity into national grid which is constructed by government and private sector.

He said that bilateral and multilateral energy agreements would be signed to attract hydropower investment.

He said that the 99 MW Tamakoshi project will be started next year. He said that Nepal Electricity Authority and the general public can invest in the project. He said that customs duty on import of household electrical appliances will be reduced to increase electricity consumption.

He said that the Karnali Irrigation Project will be taken forward next year, the access road will be constructed in the power project and 75 percent of the cost will be paid to the power project promoter.

He also said that the Dudhkoshi Reservoir Hydropower Project will be started and the credit rating of the Electricity Authority will be given.

He said that 375 MW of solar energy is expected to be generated next year. He has also announced to provide subsidies to the local level to produce biogas.

The major highlights  incorporated in the new budget for energy sector:

  1. Fully waive fee on electricity to households consuming up to 20 units of electricity and 50 percent waiver on households using up to 50 units of electricity per month.
  2. Govt to reimburse 75 percent of the investment into transmission lines constructed as per their need.
  3. Minimum 100 electric vehicles to be brought into operation in coordination with Sajha Yatayat in the Kathmandu Valley
  4. 500 charging stations, terminal buildings and other infrastructures to be built across the country with involvement of the private sector
  5.  Light vehicles run with petrol to be displaced by electric vehicles by 2088
  6. Rs 12 billion allocated for the implementation of Prime Minister Employment Program
  7. Rs 4.7 bn allocated for the construction of Butwal-Gorakhpur cross-border transmission line and preparation for the construction of Kohalpur-Lucknow transmission line
  8. Rs 37.61 billion allocated for developing electricity transmission lines and substations
  9. Rs 2.76 billion allocated for alternative energy promotion
  10. Customs duty on home appliances like washing machines and dishwashers reduced to encourage use of electronic appliances
  11. Customs duty on the import of induction oven set at 1 percent to discourage use of LPG gas
  12. Commercial hedging will be introduced to simplify the glitches in foreign exchange in foreign direct investment
  13. The government this year too has reiterated its same old commitment to expand the petroleum storage capacity of the country so that it can meet the national demand for at least three months.
  14.  In teams of creating electricity demand Rs 12 billion will be allocated for the establishment of chemical fertilizers.