Kathmandu:

Nepal is a mountainous country located between the Tibetan Plateaus and the Gangaitic Plain of Asia. It is gifted with high Himalayas on north with highest elevation of 8848-m to fertile plain on south with elevation of 200-m within a short horizontal distance of just 200-km.

Nepal has more than 6000 rivers mostly originating from the Himalayas flowing south to India with average annual run-off of 225 billion cubic metre. The major river basins of Nepal are Koshi, Gandaki, Karnali and Mahakali. The large differences in elevation and abundant snowmelt as well as monsoon flow offer huge hydropower potential in Nepal.

Trend of hydropower:

Development of hydropower in the country started way back in early 1900s. Pharping power plant with 500 KW installed capacity was the first hydropower installation in the country, commissioned in 1911 followed by the 640 KW Sundarijal plant, commissioned in 1936. Then, several plants were installed with bilateral assistance from Russia, China and India. These plants are 2.4 MW Panauti, 10 MW Sunkoshi, 21 MW Trishuli and 14.1 MW Devighat.

However, due to size of the project, multi donor assistance was initiated in the late 1970s for the financing of Kulekhani-I Storage Project (60 MW) with cascade of 32 MW Kulekhani-II followed by 69 MW Marsyangdi Hydroelectric Project. World Bank, the Asian Development Bank, Saudi Fund and, German and Japanese governments were involved in it.

After restoration of Democracy in 1990, to overcome the critical situation of load shedding during the late 1980s, the government decided to open this sector to local and foreign Independent Power Producers (IPPs). At the same time, Nepal Electricity Authority (NEA) has also initiated several projects with different financing modes. As a result Khimti (60 MW), Bhotekoshi (36 MW), Indrawati (7 MW), Piluwa (3.5 MW) ) and Chilime (20 MW) were developed by the foreign and local IPPs, whereas NEA also successfully commissioned projects like Ilam (6.2 MW), Modi (14.8 MW) and Kaligandaki- A (144 MW). Combination of different sized projects with various funding mode have proved to be successful.

As a result 292 MW capacity was enhanced within a short period of 10 years, through investment of about $402 million by public sector and about $300 million by private sector, which it self is a record in the history of Nepal for that kind of financing and project development. The period after 1990 can be considered as one of the prime period in the development of hydropower in Nepal. Through that period, not only several projects were built with different financing modes but also many experiences were gained towards in-house capacity building. But, in absence of continuation of such development in past several years, country is facing power shortage from this year, which will last for several years to come.

Future course of action:

In order to meet the present power deficit, future course of action must be based on two principles, which have been widely accepted on the basis of past experience. First, implementation of small-and medium-sized projects to be encouraged on fast track basis to meet national power demand. Second, export-oriented large sized projects need to be developed for regional cooperation.

Maximum utilization of the local resources to develop medium-sized projects and public private partnership in large hydropower may create the win-win atmosphere for all stake holders. Establishment of a NEA subsidiary holding company, which will take part in such partnership through equity, for example in West Seti, Upper Karnali or Upper Tamakoshi as necessary, on behalf of the government and NEA, would be a long term beneficial step to Nepal.

(The author is general manager, Engineering Services, Nepal Electricity Authority)