Since the formation of the SPA government, investors have showed a heightened interest in Nepal’s hydropower development. For a dozen projects, twenty companies, mostly Indian, have forwarded their proposals, and in terms of the number of offers, Karnali appears to be the main attraction. With the opening up of private investment in hydroelectric development, a number of domestic and foreign investors have already put money into power generation in Nepal. Both Nepal and India continue to face power shortages. Even Kathmandu and New Delhi have to live with load-shedding, and given the ever-increasing demand for power in both, it is fitting that they should discuss ways of developing Nepal’s power potential
to mutual benefit. In this context, last week’s Power Summit ’06 brought together private power producers of both countries.
The objective was to identify areas of cooperation as well as to explore the market for the energy generated in excess of the domestic demand.
The export market that comes immediately to anybody’s mind is India. This initiative deserves serious consideration for transforming it into feasible projects. Mere repetition of Nepal ranking among the richest in hydropower potential will be futile. The projects which have attracted particular foreign interest include Arun III, Upper Karnali and Upper Tamakoshi, and Budhi Gandaki. Foreign interest in big and medium-size projects implies power generation for export.
But export also requires infrastructure, such as adequate transmission lines of high standard.
Nepal has tried to attract FDI in water resources development, but prospective foreign investors would also want to have the government’s commitments on certain things, including licensing details, easing of certain rules or restrictions, land requisition and profit repatriation.
Water being a highly sensitive issue in Nepal and the present period a transitional one at that, it would indeed be difficult for the government to plunge into projects, especially big ones, attracting Article 126 of the Constitution. Some sort of national consensus is thus necessary.
Exploiting the water resources means that both Nepalis and foreigners should benefit in a reasonable way. But at the same time, Nepali negotiators and decision-makers should also
be informed, realistic and business-like in driving a bargain. Merely laying the blame at others’ door won’t do in the present context.
Legitimate Nepali interests should be protected and pursued. This apart, the government also needs to discourage the tendency of firms getting a licence and holding it for an indefinite time without starting the work.