Nepal’s initiative to benefit Indian hydropower companies


    Flag-Pins-Nepal-India_20120210094839SILIGURI: With high hydropower potential but low output level, severely power starved Himalayan country Nepal is in process of widening the bottlenecking identified as hindrance for the power promoters, mainly from India, to come forward. The country has a set objective to produce 25,000 MW extra hydropower by 2030.

    According to Mr. K D Adhikary, Joint Secretary at Nepal Energy Ministry, conflicting acts are causing trouble in initiating power projects. Thus, the country is planning to amend these acts.

    As the Bonus Act and Electricity Act are contradictory to each other on the issue of bonus, so is the case of local Self-governance Act and Electricity Act on the issue of electricity royalty. Similarly, acts about registration fees, royalty, income tax, value-added tax ( VAT) are also conflicting. Officials in many departments have urged the government to review many other similar contradictory acts.

    Issues like integrated license, Power Development Agreement (PDA), one-door policy, land acquisition and its ceiling, determination of the standard of resettlement, local participation in share investment and tax discounts are also being re assessed.

    Undoubtedly these are going to make things easier for Indian companies getting involved into Nepal’s hydropower initiatives through projects like Upper Karnali (900 MW), Marsyangdi II (600 MW), Arun III (900 MW) or Tamakoshi III (650 MW). There are many other potential projects to tap in.

    Nepal government has an objective to generate 25,000 MW fresh hydropower and build adequate power evacuation infrastructure by 2030 to have 18,000MW export capability in hand.

    But, “It is tough for financially crunched Nepal to develop all these alone. So, we are open for collaborations from other countries like India,” said Nepal Power Ministry officials.

    On the other side, “Nepal is a major source of green energy and promising field for Indian power developer companies. We are always keen on shouldering responsibility to harness this,” said Mr. A.B.L. Srivastava, Director (Finance) of Indian hydropower major NHPCBSE 0.27 % Limited.

    Despite having 42,000MW economically viable hydropower potential Nepal’s present production is around 1000MW, much lesser than its need at peak hour. The shortage forces the country’s national power monopoly, Nepal Electricity Authority, to impose mandatory load shedding that sometimes goes even for 12 hr a day.

    “Over 40% industrial operations are almost dead due to power shortage,” said Nepal’s major trade and commerce association members. “The new initiative may alter the scenario,” they said.

    Source : The Economic Times