Kathmandu, August 21 :

Power shortage over the past several years has hit revenue generation, industrial sector development and consumers alike as Nepal has failed to exploit its tremendous potential, feel experts.

State minister for water resources Gyanendra Bahadur Karki today admitted that there is an acute power shortage in the country that has created problems for the industrial sector for some time now. He said that resolving the power shortage by exploring hydropower development is a major challenge.

Emerging challenges in hydropower can be resolved if a congenial atmosphere is created for the sector, said Karki while addressing the inaugural function on Hydropower Invest Mart 2006 that kicked off in the capital today.

The two-day long mart is focusing on exploring hydropower potentials and effective implementation of water resource projects to meet the acute shortage of electricity.

Speaking at the same function, Binod K Chaudhary, president of Confederation of Nepalese Industries (CNI), one of the organisers of the Mart said that due to shortage of electricity, industries are facing serious problems.

Recently only 39 MW of electricity was added to the national grid and there are growing fears that load-shedding would continue until 2012 if we could not develop more hydropower projects, said Chaudhary.

The country is lacking effective implementation and planning to enhance the capacity of electricity generation to meet the growing demand of power, he said, adding that there is capacity limitation, weak institutional funding and the power purchase agreement (PPA) has been on hold totally.

Given such a difficult scenario, the investment climate has to be improved to set up more hydropower projects, he said.

Dr Ingrid Shwoerer, director at GTZ project, said that there exists tremendous potentials in Nepal to develop hydropower projects and the mart would be an appropriate platform to discuss and move ahead effectively.

Suman Basnet, director of Winrock International hydropower sector said the sector has been facing the problems of financing, costing, lengthy approval process, technical problems, social and environment problems, supply and demand mismatch, risk management and infrastructure.

Basnet said that small hydropower projects have been good for independent power producers in Nepal.

The main objective of the mart is to bring together all the players in the hydropower sector like policy makers, entrepreneurs, investors, regulatory bodies, power purchasers and distributors, financing agencies and insurance companies.

In the mart, 26 independent power producers, 12 banks, eight insurance companies, 20 suppliers and contractors and more than 60 potential investors are taking part.

A total of 16 power producers are participating at the exhibition, informed the organiser.

The organisers of the hydropower power mart are CNI, Small Hydropower Promotion Project (SHPP)-GTZ, Consulting and Engineering entec ag, Switzerland and Winrock International.