My tryst with the Far Western region of Nepal is relatively new. But I must admit, whatever I have seen so far there has been a treat to my eyes. Nowhere do I find the region to be less from the rest of Nepal. Except when it comes to development, especially the development of the power sector.
If I am to divide Nepal into three blocks from east to west of equal sizes and name them respectively the Eastern, Central and the Western Regions, and group hydropower projects on the basis of feasibility licences, generation licences and generating plants in the three regions, it tells an interesting story of prospects and divide.
Of the survey licenses for 15,710.97 MW issued to different projects by the Department of Electricity Generation, 5,929.45 MW (37.74%) fall in the Eastern, 2,663.84 MW (16.96%) in the Central and 7,117.68 MW (45.30%) in the Western Region. Survey licenses are also a measure of the potential for development.
But this story quickly fades when it comes to realisation of the potential. If the survey licences are indicators of potential, the generation licenses can be considered a fair indicator of projects under construction.
Of the generation licences for 7,415.96 MW issued to different projects,3,092.46 MW (41.70%) fall in the Eastern, 3,203.56 MW (43.20%) in the Central and only 1,119.94 MW (15.10%) in the Western Region.
Thus, the Western Region lags behind tremendously in harnessing its potential.
This lag becomes painful, when one realises that of the total generation of 1,315.20 MW in Nepal, the region contributes a meager 58.40 MW (4.44%) only. Hydropower projects cannot and should not be seen in isolation. The construction of any hydropower project brings multifaceted benefits in important areas of road, power, housing, employment and livelihood creation to the project area.
But the impediment? Transmission lines. All sorts of transmission lines as a matter of fact. A lack of transmission lines and the poor state of the existing ones have not only impeded the construction of mega projects in the Western Region, but also electrification.
With many districts yet to be connected to the national grid, the region has the poorest per capita electricity access and consumption in Nepal.
Fortunately, much effort and work have already been done in planning and identifying the different transmission lines.
The Transmission Master Plan (2015) of Nepal Electricity Authority (NEA) and the Transmission System Development Plan of Nepal (2018) of Rastriya Prasaran Grid Company Limited (RPGCL) are elaborate plans of the transmission lines. A conducive environment for the development of mega projects in the region requires the timely development of: i) the 132 kV, 220 kV and 440kV transmission lines planned in the Seti, Karnali and the Bheri river corridors, ii) the 400 kV transmission lines from New Atariya to New Butwal, which is a part of the planned East–West power highway, and iii) the 400 kV New Butwal-Gorakhpur, Dododhara-Bariely and Kohalpur-Lucknow cross-border transmission lines with India.
The Transmission Plan of the RPGCL puts the total cost of constructing the 400 kV, 220 kV and 132 kV transmission lines at US$ 3,767.91 million. It further estimates another $2,269.76 million for the construction of substations at the 400 kV, 220 kV and 132 kV voltage levels. Summing up, the country needs $ 6,037.68 million, or Rs 712.45 billion (43% of the present annual budget) for the construction of the high voltage transmission lines alone. For a developing country, with limited financial resources and many compelling priorities and projects, we cannot develop all the power projects and transmission lines on our own. We need external financial support: investment in the form of loans or grants. Given the non-commercial nature of transmission lines, grants are always preferable to loans. Traditionally, the principle sources of foreign investments at the government level in Nepal have been the multilaterals (World Bank), bi-laterals (Exim Bank) and foreign governments. And the general terms and conditions of financing have also become more or less standardised over time.
I stand bemused as to how quickly the word MCC has found space among general Nepalis. And how, everyone now not only has an opinion, but also a voice. And disturbingly, how these opinions have become attached to Nepali nationalism. Amidst the never ending debate on MCC, I feel concerned that we have digressed from the central point – that we need power projects and transmission lines, and external funding to build them.
Inaction and status quo always have a price. A decade of load shedding is still fresh in our minds, and what a price we have paid.
In the last six years alone, we have spent Rs 150 billion importing electricity, roughly the cost of constructing the Budhigandaki.
The conclusion of financing of any mega project is always a result of hard work and a lengthy process to create a conducive environment for timely completion of projects and protection in loan recovery.
Since there is no recovery in grants, the terms are generally milder than loans. And when a Financing Agreement for any mega project is achieved at an international level, it sends a signal to the international community that the country is ready for mega projects and international finance. But, the converse is also true. The question is not whether or not Nepal can afford $ 500 million that the MCC has committed as grant money.
It certainly can. No price is more when it comes to safeguarding our values and the idea of a nation.
But it is certainly not that situation in our hand. The real question is, how can we quickly develop our power infrastructure, also leveraging international financing support, including the present MCC financing opportunity with us, while protecting our common good? The need is to act.
The need is to develop. The need is take the country forward.
A version of this article appears in the print on October 29, 2021, of The Himalayan Times.
