Nepal | September 26, 2020

EDITORIAL: Energy for growth

The Himalayan Times
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With the surplus energy in its hands, the government should encourage private sector to set up more industries and manufacturing units across the country

Not so long ago Nepal Electricity Authority (NEA) used to urge consumers to use less electricity during peak hours and use less energy-consuming devices citing lesser production of electricity than the domestic demand.

The situation has now changed with the agreement of Power Trade Agreement between Nepal and India in 2014. Nepal is now purchasing around 200 MW of electricity from India during the dry season reducing the perennial power cut.

Apart from purchasing energy from India, Nepal is also going to add around 700 MW of electricity in the national grid by next year.

According to the plan 456-MW Upper Tamakoshi Hydroelectric Project, 30-MW Chameliya and 14-MW Kulekhani III, all commissioned by NEA, will come into operation by next year and, 200-MW more electricity will also be generated by various independent power producers at the same time.

It means that Nepal will almost have doubled the energy output after a long gap of sluggishness in the energy sector, which was opened to the private sector after the restoration of democracy in 1990. It is a positive sign that Nepal will no longer have to face energy crisis in the days to come.

Now the question arises: How will the surplus energy that Nepal will have from next year be used? Energy Minister Janardan Sharma, during an interaction with members of the business community, urged them to expand business, industrial and manufacturing activities using the energy generated from within the country and borrowed from outside.

He assured the business community that the government will be providing uninterrupted supply of electricity to the industrial sector and that it no longer has to depend on expensive captive plants to operate their businesses. Regular supply of energy has brought about a positive change in economic growth.

The Asian Development Bank has forecast that GDP will grow about 6.2 percent this fiscal, largely due to enough supply of energy. NEA has regularly supplied electricity in major industrial cities through its grid after it started purchasing energy from India.

The government has envisaged generating 10,000 MW of electricity in coming 10 years and it has also given incentives to attract private sector into it. The “take or pay” policy taken by the ministry has encouraged the private sector to make more investment in it.

Consumption of electricity is imperative to boost national economy and to graduate the country from the least developed to a middle-income country by 2030, a target set by the government. With the surplus energy in its hands, the government must come out with suitable plans to encourage private – domestic or foreign – sector to set up more industries and manufacturing units across the country so that economy will grow and the people will get job opportunity.

The private sector should also look for better options of investment as the government has pledged to provide energy required for running industries and businesses. The government must provide special incentives to those industries, businesses and service sector that consume a lot of energy.

Nepal is expected to be free from load-shedding in two years to come. But we need more energy to run big industries to achieve double digit economic growth within a decade.

Ban in limbo

No rule or law is of any use if it is never implemented. This applies to many things in the country. Take the plastic ban imposed two years ago.

Just when it was starting to take effect, the major earthquakes shook the country and diverted its attention and that of the authorities. The rule was neglected and its non-implementation was understood for some time. But even two years afterward, the plastic ban is nowhere enforced.

According to the plastic manufacturers’ association, 30 per cent of the 200 plastic plants have closed down but 30 per cent of the plastic bags thus falling short are being imported.

The announcement of the ban was generally welcomed while the plastic manufacturers protested, calling it a ‘one-sided’ ban.

But the present situation is worse because it does not help to protect the environment or make the valley clean. On the contrary, it has harmed the local producers of plastic bags because the shortfall is being met through imports. The government should either lift the ban or enforce it strictly.

The latter course will clearly be much better.

A version of this article appears in print on April 19, 2017 of The Himalayan Times.

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