Kathmandu. In the budget for the coming fiscal year, the government has made arrangements to raise investment for reservoir-based projects.

Currently, river-based semi-reservoir projects (PROR) are being constructed in Nepal. The PRORs are much lower than the RORs.

The state plans to generate 28,500 MW of electricity by 2035, increase the domestic consumption and export the remaining electricity to Bangladesh and India.

It is said that the possibility of generating electricity from the current ROR project is low. Therefore, the government has taken a policy to provide subsidy for reservoir-based projects in the budget of the coming fiscal year.

In the budget for the coming fiscal year, the government has said that it will adopt a policy to sell up to 40 percent of the shares to the general public in the first year itself if the promoters ensure that 100 percent of the budget is invested in reservoir-based projects to encourage the private sector for the development of large reservoir-based projects.

Energy promoters are very excited after the government made such a provision in the budget. This policy taken by the government will not only benefit the promoters of the private sector but also the government companies.

A total of 27 companies, including 9 government-owned companies, have approached the Department of Electricity Development (DoD) to produce 9,487.1 MW of electricity to construct reservoir-type projects in Nepal. Out of the 27 companies that have joined the department, seven are government-owned while the rest are from the private sector.

The state-owned Nepal Electricity Authority (NEA) is preparing to generate 2,811.5 MW of electricity from the 9,487.1 MW reservoir-type projects.

According to the Department, out of the 7 projects that have applied for generation permission for the construction of reservoir-type projects, 4 companies are under the Nepal Electricity Authority (NEA) and three are from the private sector. It has applied for permission to generate 4,147 MW of electricity.

Similarly, applications have been received for 2,535.39 MW electricity survey license. Out of the 8 projects, 5 projects are owned by the Nepal Electricity Authority (NEA) and the remaining 3 are from the private sector.

Similarly, 12 projects have applied for survey license for 2,804.71 MW capacity.

Currently, the average cost per MW is Rs 200 million to construct a project of RoR nature in Nepal. It is estimated that the project will require at least Rs 35 to 40 crore per megawatt.

Experts say that it is difficult for such projects to recover the cost only by selling electricity.

According to promoters, banks and financial institutions are reluctant to disburse loans for such projects as it takes time to recover the cost by selling electricity. Therefore, it is very difficult to ensure that the promoters who have said in the budget will invest hundred percent of the money in reservoir projects.

The promoters have demanded that the state and local governments should develop the area around the project as a tourist destination by coordinating with the federal government and the government should revise the electricity tariff of such projects in winter.

Promoters have also complained that the government will give priority to the purchase of electricity from government projects and not to give priority to private projects as there are many government projects.