Lack of political will, clear policy pegging back Nepal’s hydropower sector

KATHMANDU, AUG 27 -

Experts and power sector players have blamed the lack of political will and policy inconsistencies for the sluggish growth of hydropower development in Nepal at the Power Summit 2013 that kicked off on Monday.

They said multifold procedures in developing hydropower projects, involvement of larger number of institutions and contradicting laws were the barriers in harnessing of hydropower potentials.

“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).

They also called for the government’s role in making a realistic energy demand forecast which would guide investors as regards the size of investment and that of projects.

According to Prajapati, since hydropower projects have a long gestation period, harmonisation of law in the power sector is essential.

RV Shahi, former power secretary of India, said that uncertainty over 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.

Jointly organised by IPPAN, PTC India Limited and Non-Resident Nepali Association (NRNA), the Power Summit was inaugurated by President Dr Ram Baran Yadav.

Addressing the summit, President Yadav said Nepal’s power sector development should be integrated with the neighbouring countries for the benefit of the entire region. “Nepal’s ability to harness hydropower depends on how we interact with our neighbours,” he added.

Finance Minister Shankar Prasad Koirala, stating that the government has accorded the top priority to the hydro power among all economic sectors, said the government was also working towards the simplification and revision of the policies to boost investment in the sector. “Preparations are underway to sign power purchase agreement with the projects that are lying in wait for long,” he added.

Energy Minister Umakant Jha said signing a Power Trade Agreement (PTA) with India is the only solution to harmonise the seasonal crisis and energy surplus. “Efforts are being made towards concluding PTA with India,” he said.

Investment Board Nepal CEO Radhes Pant said Nepal’s goal of graduating from LDC status will not materialise until we tap the hydropower sector.

On the occasion, Norwegian Ambassador to Nepal Alf Arne Ramslien assured to extend all possible support from his government for the hydropower development aimed at prompting Nepal’s inclusive growth.

Chinese Ambassador to Nepal Wu Chuntai said his government has been encouraging its private sector to make investment in Nepal’s hydropower sector. “Chinese companies can share their expertise and their capital with their Nepali counterparts. Cooperation between investors of different countries should be encouraged for the benefit of Nepali economy,” Wu added.

Jaideep Mazumdar, deputy Chief of Mission at Embassy of India, said Nepal’s government and private sector have answers to all questions concerning the hydropower development, apart from the answer about when to start. “Once the country proceeds towards developing hydropower in full fledge, the Indian government is keen to support Nepal in her mission of exploiting hydropower to the fullest,” he stated.

Source: The Kathmandu Post