Kathmandu, September 22:

Private sector has not been that much enthusiastic to invest in the hydropower sector in Nepal due to the absence of North-South transmission line, an official at the Department of Electricity Development (DED), said.

More than 230 licenses have so far been issued to various companies and firms since the introduction of the Electricity Act, 1992, and Electricity Regulations, 1993, but half of them have been cancelled as they found it too expensive to invest in the transmission lines, besides financial crunch.

Normally, a license for a hydropower project remains valid for a period of five years for feasibility study, generation, transmission and distribution purposes, according to the Electricity Regulations, 1993.

“One of the major reasons behind the private sector not being much enthusiastic in the hydropower sector is the absence of North-South Transmission Line connecting the east-west national grid,” said Jaya Keshar Mayake, director general at the DED.

He said most of the sites technically and economically feasible for hydropower projects are located in hills and mountains – that too are away from highways – where transmission lines have yet to be built to connect the power to the nearest point of the national grid.

“If we expect the private sector in the hydropower, we first need to build transmission lines and link roads in the areas where a cluster of small and medium-sized projects can be built,” Mayake said.

The government, he said, has plans to build four North-South transmission lines from east to west so as to attract private sector in the hydropower.

They include the 132 KV Kabeli-Duhabi in the east, 220 KV Khimti-Dhalkebar and 132 KV Upper Tamakosi-Khimti in the central region and 132 KV Chameliya-Dhangadi transmission line in the far west. The government has given first priority to build the 132 KV Kabeli-Duhabi transmission line.

Once the transmission line comes into operation, a cluster of projects could also be built on the Tamor River basin along with the 30 MW Kabeli hydel project.

The Kabeli project is being developed by mobilising 40 percent of the World Bank’s Power Development Fund (PDF).

Subarna Shrestha, chief of the Kabeli hydropower project at the DED, said that four joint venture companies have been qualified for the development of the project.