Powerful synergy in power sector

Kathmandu, September 7 :

With a tremendous potential in hydropower generation in Nepal, power developers

from abroad and Nepal are showing interest in investment, both in small and big hydropower projects.

The power summit, first of its kind being held in Nepal, mostly with participation from Indian power developers, clearly shows that Nepal’s hydropower could be developed effectively for the larger good of people.

K P Oli, deputy prime minister and foreign minister, while addressing the ‘Power Summit 2006’, said that hydropower is crucial to Nepal’s prosperity which ultimately will help in the socio-economic advancement of the country. He said that the government is committed to 100 per cent rural electrification.

Highlighting the importance of hydropower sector, Oli said that it is a commodity that helps in increasing the purchasing power and fuel country’s economic growth. He said that India is the prime and only market for Nepal but both countries are talking about power trade for decades without any significant breakthrough.

Oli assured that the government is committed to establish an independent regulatory commission in the near future to ensure long-term fairness and predictability of the sector and to ensure consumer protection. He said that from the 300 MW Upper Karnali and the 400 MW Arun-III projects, the net royalty revenue earned would be about two billion rupees. The royalty revenue is a small part of the project benefits, he noted.

Finance minister Dr Ram Sharan Mahat said that unless we have clear policies, smooth hydropower development is not possible. The government has already made flexible hydropower policies to attract foreign investors, Dr Mahat informed. He stressed on the need to bridge trade deficit through hydropower development.

Indian ambassador to Nepal, Shiv Shankar Mukherjee observed that the summit renders vast opportunities to power producers of both countries. Mukherjee expressed concerns over controversies, doubts and hesitation over bilateral cooperation. He referred to Nepal’s unique hydropower assets and the unparalleled opportunity to meet its own burgeoning energy demand as well as generate revenues from exports.

“The absence of adequate cross-border infrastructure has constrained the development of power trading between the two countries, denying Nepal the opportunity to earn revenue from spilled energy in wet season and the possibility of importing power from India in the dry season,” said ambassador Mukherjee.

T N Thakur, chairman and managing director PTC India Ltd said the summit would be successful in identifying potential power projects for effective hydropower development.

Ambassador Mukherjee hoped that the summit will break new grounds in the development of hydropower sector in Nepal, not only in terms of power projects, but also in related areas of institutional partnerships in financing power and other infrastructure projects, project services and equipment supplies.

“The government of Nepal, as we understand, intends to utilize a considerable part of the concessional line of credit of $100 million extended by the government of India for augmenting power generating capacity in Nepal, expanding rural electrification and

developing high voltage transmission interconnection to India. I can assure you that we would take steps to simultaneously develop the connection in our territory. I believe we can have at least two transmission highways in two-three years,” said Mukherjee.

Over 150 participants from India and Nepal are taking part in the two-day long Power Summit, being jointly organised by the Independent Power Producers Association Nepal (IPPAN) and PTC India Ltd.

At the inaugural session, state minister for water resources, Gyanendra Bahadur Karki, president of FNCCI Chandi Raj Dhakal, acting president of CNI Narendra Basnyat, acting president of Nepal-India Chambers of Commerce and Industry (NICCI), Shashi Pandey also expressed their views on Nepal’s hydropower potentials.