The nation must now try to increase the per capita electricity consumption of its people
Nepal Electricity Authority (NEA) deserves a pat on the back for doubling its profits in just six months. The state-owned utility made a profit of Rs 12.12 billion in the first six months of this fiscal year 2021-22, which is double the Rs 6.18 billion profit made last fiscal year. The NEA was able to earn the huge profit due to a number of factors. They include leakage control, increase in power export to India and substantial decrease in imports, and reduction in the operating costs. Its leakage control campaign, which brought down electricity loss in the system by 2.73 to 14.45 per cent in the six-month period, helped raise NEA's revenue substantially. For a country known for power cuts lasting up to 18 hours a day just a decade back, things turned for the better with the appointment of Kul Man Ghising as NEA's managing director in 2016. During his first five-year tenure, Ghising turned the loss-making entity into a profit-making one, while making the country's notorious power outages history. The NEA, which was running a loss of Rs 8.89 billion in 2015/16, shocked everyone when it made a whopping profit of more than Rs 11 billion in 2019-20.
Nepal today produces more electricity than it can consume with the addition of the 456-MW Upper Tamakoshi Hydropower Project and a number of smaller private sector undertakings, which has reduced power imports significantly from India. Nepal has imported power worth just Rs 2.5 billion till now from what was Rs 21.8 billion last fiscal year, a sharp decline. Ghising says the total electricity import bill for this fiscal year would not exceed Rs 10 billion. Power exports to India, on the other hand, have more than doubled in the first six months of this fiscal to Rs 805 million compared to Rs 316 million for the whole of 2020-21. Nepal is the first country in South Asia to take part in the Indian energy exchange market since November last year, which became feasible following the Power Trade Agreement reached in October 2014 during the official visit of Indian Prime Minister Narendra Modi to Nepal. However, power can only be exported to the Indian power exchange market from the two power projects built with Indian assistance – a total of 39 MW – as the designated authority has put a ban on purchasing energy produced or distributed from investment by countries other than Nepal.
There is need for many more negotiations between Nepal and India before NEA can sell all of its surplus energy to India for now, and profitably. Nepal has been lobbying hard to sell power from private projects, which it buys at twice the price that India is willing to pay. Power export also hinges on having the required infrastructure in place, namely, cross-border transmission lines. The MCC compact, singed between Nepal and the United States, envisages the construction of a second cross-border transmission line with India in the central part of Nepal. However, opposition to the deal by the communist parties has stalled its progress. With hundreds of megawatts of power going to waste, the nation must try to increase the per capita electricity consumption of its people through more reliable power supply and attracting energy-intensive industries.
Lift restrictions
Citing declining numbers of COVID-19 cases and also the death rate, major tour operators have urged the government to lift some mandatory provisions that are in place. The leading tour operators have asked the government and COVID-19 Crisis Management Centre (CCMC) to lift the provisions of having to submit papers even by those who have been fully vaccinated during arrival and exit. They have asked the government to make it mandatory to submit documents such as PCR reports only for those who are not fully vaccinated. It would be better to seek documents only based on the destination, policies put in place by transit countries and respective airline companies.
Most developed countries have already lifted restrictive measures taken earlier to control the spread of the coronavirus following the mass immunisation campaigns, which have helped bring the virus under control. Nepal should also lift some of the mandatory provisions, including filling out an online form for anyone wanting to travel to and from Nepal, which were put in place when the COVID-19 pandemic affected the entire country with high numbers of infections and deaths. Lifting the restrictive measures will not only help ease travel but also give a boost to tourism activities.
A version of this article appears in the print on February 22, 2022, of The Himalayan Times.