Nepal has organised a four-day power summit to attract investors to generate 10,000 MW of electricity by 2026.
Inaugurating the summit in Kathmandu on Tuesday, Prime Minister KP Oli urged investors to put their money in Nepal’s energy sector without fearing political instability, policy hurdles and financial loss.
“After passing the constitution, Nepal has begun a new phase of development, and we are open for business,” he said. “Invest your money in Nepal’s energy development with confidence. Your investment would be safe, and the government is ready to extend the required support for this.”
Investors from India, China, Singapore, Thailand and the US are attending the summit jointly organised by the Energy Development Council (EDC), the Ministry of Energy (MoEn) and the Investment Board of Nepal (IBN). The power summit is the first of its kind in Nepal.
Despite having a potential to generate 43,000 MW of electricity, Nepal’s installed hydropower capacity is just 787 MW, which is less than half of the demand. The Nepal Electricity Authority (NEA) rations electricity to 12 hours a day.
However, after last year’s five-month border blockade by India, there is a sense of urgency among Nepal’s political leaders and policymakers to accelerate construction of mega hydropower projects. The government recently passed a strategy to generate 1,450 MW in three years, and another 8,500 MW in another seven years.
To help investors develop their projects more swiftly, the government is establishing a coordination committee, simplifying administrative procedures and restricting Water and Energy Commission (WECS) and other line ministries.
The government is also adjusting electricity tariffs in line with Power Purchase Agreement (PPA) rate, providing an incentive of Rs 5 million per MW for hydropower projects that intend to supply electricity for domestic use and tax exemption for the projects that are completed in 10 years.
“We have already initiated some of these reforms, and we will initiate the rest very soon,” said Dinesh Ghimire of the MoEn.
Gagan Thapa, President of Water Resources Committee of Parliament, told investors that his parliamentary committee has decided to constantly monitor progress in policy reforms and implementation. “We will be presenting progress reports in parliament in every three months,” he said.
Investors welcomed promises made by the government, but they are not sure whether these promises will be fulfilled. “Procedures are too lengthy, and government authorities are transferred too frequently,” said Guo Jing, Deputy Project Manager of China International Water and Electric Corp Rasuwagadhi Hydroelectric Project. “Even if just process is shortened, we will feel more encouraged to invest money in Nepal.”