Private sector keen on investing in power

Kathmandu, January 2 :

Nepali entrepreneurs have evinced a keen interest in investing in hydropower development in the country. However, they asked the government and the concerned authority to bring in a concrete plan ensuring a conducive business environment to resolve the power shortage problem.

They expressed their interest in power development at an interaction organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on Tuesday.

Power is a key factor for economic and industrial development, an area where Nepal continues to face a serious shortage.

It is high time for the government and Nepal Electricity Authority (NEA) to plan ways to meet the growing demand and overcome problems, said Kush Kumar Joshi, second vice-president of FNCCI.

He further stated the energy is the most essential factor that impacts on industrial output and competitiveness of products in terms of price and quality. “Supply is limited while demand is growing at an annual rate of over 12 per cent. The situation, if continues, will not only hinder industrial activities but also de-motivate domestic and foreign investment,” Joshi added.

He also said that the need of the industry is for ‘quality power’, which includes regular supply of power on a said voltage level and no frequent cut-offs. “New industrial investments are blocked due to unavailability of required quality and quantity of power,” he said.

Joshi asked that NEA should immediately bring in a plan for solving power shortage, otherwise the load shedding problem is going to exist till 2013. A short-term and a long-term plan should be devised, encouraging private sector investment in generation as well as transmission of power.

If the government inks a cohesive plan, the Nepali private sector is ready to lend its support in hydropower activities, he said.

Joshi stated that a zonal meeting of district chambers of Janakpur zone has recently passed a resolution expressing their commitment to invest in Upper Tamakoshi hydropower project. The Nepali private sector is ready to build a 309MW power project, which is estimated to cost over Rs 30 billion.

Besides sorting out problems related to infrastructure and difficult geographic terrain, government policy on power purchase agreement (PPA) and administrative hassles should be made investment-friendly in order to attract private investment, said Prem Bahadur Shrestha, chairman of Panchkanya Group.

Shrestha asked for restructuring of NEA and policies on hydropower development in order to attract private investment. “It is only the attitude, which needs to be changed. Resource is not a big deal,” he added.

Pradeep Jung Pandey, chairman, industrial promotion committee at FNCCI, underscored the need for a partnership approach for luring investment, while consumer awareness and implementation of energy efficiency policy could be instrumental in saving power.

R M Sulpya, director, power trade department at NEA made a presentation on investment opportunities for the private sector in hydropower in Nepal.

Hydropower holds a tremendous potential with only two per cent of economically feasible plants being exploited, whereas demand has already surpassed the supply, he said.

More than 15 mid and big-sized projects have been identified for private sector investment and feasibility studies have been completed. Sulpya also informed that national and international independent power producers have shown keen interest on some of the projects.