It is true that foreign direct investment (FDI) may be or is required for hydro-power projects because of the high costs and the long gestation period. Of course, at present there are a number of power projects with domestic investment. But, the big ones have to look for foreign investors. As for FDI, the PPA is calculated in US dollars, which has been quite a controversial issue. And, Khimti hydro-project is pointed out for the losses that the NEA is incurring because of the foreign exchange base of PPA. The rise in the value of the foreign exchange concerned, NEA has to go on paying more every year — the reason for the increase in its loss to the tune of billions of rupees. All this is a consequence of the lack of transparency and greater public debate among the stakeholders. Whenever the talk of PPA comes up, the thrust ought to be on Nepal’s strategic development objectives rather than serving the financial interests of a small group of individuals and political leaders.
On the issue of FDI and foreign exchange risk, Chief Secretary and former Chairman of NEA has gone on to say that the former is necessary while it is also a fact the exchange rates’ upward swing tends to put the NEA at great risks and the result is massive losses. He also has said that as the NEA chairman, the board had made some five dozen decisions in the interest of NEA. But, the incumbent Energy Minister has sent signals that they would not come in for implementation. The question that arises is, what decisions were made when the chief secretary was the NEA chairman. All is shrouded in mystery which should not have been the case. The behind the curtain decisions have to be discontinued, and greater public debate among the stakeholders should be the modus operandi besides transparency and the support of the major parties.
Source : The Himalayan Times / Editorial