Nepal Opens Investor Opportunities in Five-Year Power Crisis Crash Plan

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Written by Richard Finlayson, Senior International Editor for Industrial Info--Suffering from blackouts of up to 14 hours a day, the government of Nepal has launched an emergency plan to solve its power problem within five years. The plan will involve new power projects and the purchase of increased electricity imports from India, which borders Nepal to the south.

A $275 million program announced toward the end of March will target an additional 2,500 megawatts of power supply by improving efficiency at thermal power plants and encouraging private sector production of power from waste materials. Administrative measures will include the waiving of customs duties for materials used to produce solar power and batteries, as well as the waiving of tax on private investors and developers constructing new hydroelectric plants. Investors will also be given a discount on royalties due to the government. In addition, plans will be implemented over the next nine months to generate solar power for government offices and public institutions.

The government has also pledged to provide special security measures for investors and pass laws that would make negative interference with energy projects a criminal offence that could lead to a five-year prison sentence. Previously, the construction of new power plants suffered from the effects and an investment drought during a 10-year communist-led insurrection that ended with a peace accord in 2006. The destruction of power transmission lines when the Kosi River flooded in 2008 also set back the country's power supply.

A target of reducing power leakages by 20% over the next six months will be another measure coming into the program of a powerful three-member Energy Crisis Control Committee. Licenses will be provided directly to leading international power companies to develop a number of hydropower projects including West Seti, Upper Seti, Budhi Gandaki, Trisuli, Dudkoshi, Modi-1 and Arughat. The private sector will be asked for proposals on diesel- and coal-fired plants. One of the key negative factors in the current crisis is the low water levels in major hydro dams.

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