Care Ratings Nepal study of Nepal Nepalese Power Sector-Impact of Pandemic

Nepal’s power sector has come a long way from decade long   load   shedding   having   more   than   20   hours   of scheduled   power   cuts   to   no   scheduled   power   cuts currently.     Nepal     Electricity     Authority     (NEA)     and Independent  Power  Producers  (IPPs)  have  significantly increased the installed capacity of power projects in last 4 years. Capacity addition of power projects has grown at a CAGR of 12.05% in 3 year period till the end of FY19. 

Nepal’s installed capacity in power sector is dominated by hydropower which is also the largest available renewable energy source of Nepal. Nepal’s potential in hydropower sector is large and yet untapped considering economically viable capacity of 42,000 MW out of which only 2.69% has been achieved at the end of FY19.

Development  of  hydropower  has  faced  many  challenges in  the  past.  Earthquake  of  2015  was  one  of  the  major setbacks  for  the  sector  with  many  under  construction projects  facing  delays,  which  ultimately  impacted  cost  of the  projects.  Recent  Corona  Virus  (COVID-19)  pandemic which   has   impacted   entire   Nepalese   economy   has affected  power  sector  as  well.  The  emerging  disruption caused  by  the  COVID-19  pandemic  will  add  weakness  to the sector which otherwise had been progressing well for last few years.

While  the  pandemic  has  affected  various  sectors  across the  country,  we  have  analyzed  and  presented  impacts  of the   pandemic   on   the   stakeholders   related   to   power sector.