Nepal | September 22, 2020

Government urged to allow private sector to invest in power transmission

• BUDGET COUNTDOWN

Umesh Poudel
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Kathmandu, May 22

In a bid to ensure that the country meets its ambitious hydropower production plan and boosts its economy, power producers have urged the government to let the private sector invest in transmission lines.

During the budget announcement for the current fiscal, the government had opened the door for the private sector to invest in transmission lines. However, the government failed to implement the provision and power producers have urged the government to fulfil its commitment in the budget for the next fiscal.

Shailendra Guragain, president of Independent Power Producers’ Association–Nepal — the umbrella association of private sector hydropower developers in the country — said the government needed to fulfil its previous commitments. For instance, it had been announced earlier that developers of generation projects that start commercial operation by 2022-23 would be given incentives worth Rs 5 million per megawatt. However, the commitment has not translated into action to date.

“Independent power producers have been lobbying the government for the execution of the incentive facility following the announcement made through the fiscal budget 2014-15, but our pleas have fallen on deaf ears,” said Guragain.

He added that there was a huge misunderstanding among the federal, provincial and local governments on taxation system, jurisdiction of work and other issues. “So, the upcoming budget needs to address these issues and clearly define the roles of each tier of government.”

Private power producers have also urged the government to introduce one-window system for the private sector to boost the production and distribution of energy.

“Also, we have been facing problems supplying electricity due to lack of transmission lines,” he said, suggesting that the situation could be resolved if the government allowed private sector players to build transmission lines as per ‘Build and Transfer’ model.

Khadga Bahadur Bista, executive director of Millennium Challenge Account-Nepal, said the government should facilitate forest clearance, remove certain provisions of Environmental Impact Assessment, help in land acquisition process, address locals’ demands and formulate procurement policies to boost investment in the power sector.

“The Nepali government should go through energy policies of other developing nations to see how they are luring private sector investment in the energy sector and try to do the same here,” he opined.

Prabin Aryal, joint secretary at the Ministry of Energy, Water Resources and Irrigation, said there had been discussions on allowing multiple IPPs working in the same corridor to build a transmission line from power house to substation.

“However, nothing concrete has come out of the discussion yet,” he admitted, adding that the government is, nonetheless, serious about the issue along with other concerns raised by the IPPs.


A version of this article appears in print on May 23, 2019 of The Himalayan Times.


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