Lighting Nepal: The Vision Ahead

At time when Nepal has failed to exploit the immense hydropower potential, the capital hosted two international events to invite foreign investors in this sector. The experts and the delegates who had participated in the meet suggested the government to rectify their inconsistent policy for the sluggish growth of hydropower development in the country.

The event — claimed to be first in Nepal — held under the banner of ‘Power Summit 2013’ jointly organised by Independent Power Producers’ Association, Nepal (IPPAN), PTC India Limited and Non-Resident Nepali Association (NRNA). The event was inaugurated by President Dr Ram Baran Yadav with an objective to ‘Hastening Pace of Hydro power Development’. It reviewed Nepal’s achievement in harnessing its hydropower potential since 2006, weaknesses and measures to be adopted to accelerate the pace of hydropower development.

The topics related to project was to meet local demand to be built with local capital and foreign capital. There are other important issues which were discussed in the summit includes plan to export power, its markets integration, transmission line and power market management.

The summit was designed to cover all major areas that are prerequisite for the development of the country’s hydropower sector, including political commitment, legal and regulatory framework, realistic electricity demand forecast, electricity pricing, project financing infrastructure, construction of transmission lines and managing local expectations, according to IPPAN.

Having the participation of around 500 individuals, including power developers from Russia, Korea, Czech Republic, New Zealand, Norway, Canada, the US, India and China, the summit came up with the ides and suggested the government to develop hydropower projects in the country.

The participants asked the government to make realistic energy demand forecast which would guide investors. They also asked to simplify multifold procedures in developing hydropower projects. They complained that involvement of large number of institutions and contradicting laws have been the barriers in investment.

“The power developers have to approach as many as 10 government agencies, along with abiding by 15 national laws, for registration, licence procuring and development of hydropower projects,” said Narendra Prajapati, treasurer of Independent Power Producers Association of Nepal (IPPAN).

The representatives of government of Nepal present in the summit focused in integrating Nepal’s hydropower with the neighbouring countries for upgrading the power sector of the entire region. Ministers informed that the government is working to attract foreign investments in this sector. They also highlighted that the government has been working to invite private sector in the development of transmission lines.

In his inaugural address, President Dr Ram Baran Yadav said that Nepal can be recognized as a ‘hydropower nation’ through the development of hydropower sector. He underlined the fact that Nepal’s success depends on how it interacts with its neighbours.

Minister for Finance, Industry, Commerce and Supplies Shankar Prasad Koirala, while stating that the government has accorded the top priority to the hydropower among all economic sectors, said, “The government is working towards the simplification and revision of the policies to boost investment in this sector.

He said, that the government has allocated budget of Rs 13.5 billion for the construction of transmission line so that the hydro electricity won’t go waste due to lack of transmission line. Similarly the government is also planning to construct Upper Tamakoshi, Tanahu Seti, Budigandaki and Nalsinghad hydroprojects. “Preparations are underway to sign power purchase agreement with the projects that are lying in wait for long,” he added.

Ensuring the private sector and other concerned authority in resolving problems that are chronic in power sector, Nepal Electricity Authority (NEA) assured that the problems could be anything ranging from stalled construction transmission lines and generation projects in the public sector to delayed concluding PPAs and achieving requisites and approvals in case of IPP projects.

Along with the government of Nepal, the private sector was also found motivated in opening up markets and developing infrastructure in the form of roads and transmission networks for making Nepal’s hydroelectricity a resource of this entire region. “Our destination is to increase power generation and per-capita consumption by at least five fold in the next decade,” said Subarna Das Shrestha, President, IPPAN.

Foreign representatives who attended the power summit claimed that there are positive signs for the development of power sector, despite some hurdles. According to them cooperation between the investors of different countries should be encouraged in Nepal for the benefit of the Nepalese economy. The representatives of the countries assured that they can share their expertise and their capital with their Nepalese counterparts.

Norwegian Ambassador to Nepal Alf Arne Ramslien and Chinese Ambassador to Nepal Wu Chuntai assured to extend all possible support from their government for the hydropower development aimed at prompting Nepal’s inclusive growth.

RV Shahi, former power secretary of India, said that uncertainty over the consensus on the hydropower development in Nepal is the reason why it lags behind in harnessing the hydropower sector. He suggested the government to prioritise a few projects which could be promptly developed to boost confidence among people, developers and financers.

Sharing the experiences and lessons from Hydropower Investment in Nepal, Yaxing Zhang, Vice President of Sinohydro Resources Limited said that there is a lack of preferential provisions in the laws of Nepal. There are constraints like poor roads, lack of transmission lines, difficulties in conducting projects in very remote areas, shortage of modern equipment and tools needed for construction.

“We have worked on six projects in Nepal- Ilam Hydroelectricity Project being one of them. Two are still under construction,” he added.  It also has joined hands with local company Sagarmatha Power Company for a hydro power project.

Similarly the second event entitled International Hydropower Investment Meeting held on August 28-29 organized by Hydroelectricity Investment and Development Company Limited (HIDCL) discussed foreign and domestic investments in those areas which have been identified as potential hydropower projects in the country.

Different countries including Nepal, India, Australia, China, US, United Kingdom as well as countries associated to the European Union participated in the meeting. During inaugurating the programme, Umakant Jha, Minister for Energy invited the foreign investors to invest in such projects in Nepal. He said, “It is high time to go for storage type projects for securing the future of energy in the country.”

The foreign investors are also showed interest in investing in hydropower sector. Priyantha Wijayatunga, Unit Head, Portfolio Management Unit at the Asian Development Bank (ADB), stated that the ADB was always positive to extend its support for the development of hydropower sector in Nepal.

He said that the ADB would provide about 400 million US$ financial support in the hydropower sector in the next three years. The OPG Power and Infrastructure Pvt Ltd also committed to invest $ 10 million in this sector in Nepal.

Dalip Dua, Director of OPG Power and Infrastructure Pvt Ltd, said, that the foreign investors are willing to invest in Nepal but it’s the duty of Nepal’s Government to create investment friendly environment.

Deepak Rauniar, chief executive officer of HIDCL said that priority should be given for the power producing to end the existing energy crisis. “Political stability and commitment from the government can attract large number of foreign investors in the hydropower sector of Nepal,” he said.

Moreover, the concern of all the participants of both the summits was to create an investment friendly environment.

Source : Business Age