. The government has adopted a policy to expand the participation of private sector in transmission and international power trade along with power production. The government has allocated Rs 70 billion keeping the construction of transmission lines and substations in top priority, establishing the energy sector as the main basis for economic transformation.
Addressing the 24th annual general meeting and eighth convention of the Independent Power Producers’ Association of Nepal (IPPAN) here today, Minister for Energy, Water Resources and Irrigation congratulated IPPAN on the occasion of entering the silver year of cooperative journey with the government for nation building by investing in the energy sector.
Saying people’s expectations for good governance and change are high, he said the government was committed to addressing the issue. The Energy Ministry through a 32-point directive has prepared a roadmap for the implementation of the 100-point agenda forwarded by the government to make public service delivery citizen-friendly and result-oriented.
The Energy Minister said that Nepal was at the initial phase of transformation in energy sector, adding that the government has already created the environment conducive to bring the private sector on board in power trade and transmission line construction. He also pledged to move ahead collaborating with the private sector for the long-term development of energy sector.
Stating that some impractical legal provisions were being amended to discourage investment in energy sector, he said preparations were underway to present the Water Resources Bill and the Renewable Energy and Energy Efficiency Bill in the current session of the parliament. Sharing that electricity bill and a bill related to irrigation development and management would be brought in the upcoming session, he expressed the belief that these laws would play positive role in the development of energy sector.
Although he admitted that a single budget could not meet all people’s expectations, he claimed that the beginning of economic transformation has already begun to promote entrepreneurship, create employment opportunities, create investment-friendly environment and create investment-friendly environment. The budget has prioritized energy sector as the major basis for economic transformation and adequate resources have been allocated to advance power generation, trade, infrastructure and industrialization in an integrated manner.
According to him, transmission lines and substations, which are the backbone of electricity supply, have been in top priority of the government for the first time. A budget of Rs 70 billion has been allocated for this purpose and the target is to complete the construction of more than a dozen transmission lines of strategic importance within the next year. He believes that this can prove to be a game changer in the energy sector.
Stating that the government has adopted the policy of liberalization of power trade for the first time, he said provisions would be made to allow the private sector to trade electricity in the international market. He said that a legal provision would be made to construct the transmission line with private investment and trade electricity by charging ‘dealing charge’. This is expected to increase competition in the energy market.
He said that the government has adopted a policy of special incentives to attract the private sector to reservoir-based projects. Reservoir-based projects with 100 percent assurance of investment can issue up to 40 percent IPO in the first year and the license period of such projects will be 50 years.
Likewise, new power purchase agreement (PPA) would be signed on take-or-pay model and PPA would be opened immediately for projects with less than 10 MW capacity. It is believed that this will protect the investment of small and medium enterprises.
The minister said green investment would be attracted through the clean energy bond in the coming days and capital of Non-Resident Nepalis would be brought in energy sector through Diaspora bond. He also informed that new possibilities would be explored by linking clean energy with artificial intelligence (AI) and digital service industry in the hydropower sector at stable interest rates. The Green Hydrogen Pilot Project is an effort to build the base of clean energy economy for the future, he said.
He said that the legal process related to forest and environment has also been simplified. According to him, the Forest Act, 2076 BS and Environment Protection Act-2076 BS would be amended while handing over the project, adding that the Forest Act-2076 BS and Environment Protection Act-2076 would be amended and a provision would be made that the Supplementary EIA would not be required if there were limited changes in the approved EIA. He also said that the multi-layered process of forest clearance and tree felling order has been shortened.
The Energy Ministry has also prioritized consumption and export strategy along with power generation, the minister said. The per capita consumption of electricity at present is around 450 KW and the target has been set to reach this per 1500 KW within 10 years. He said that the ministry is preparing to come up with more creative programs to increase energy consumption.
He also said that preparations have been made for the unbundling of Nepal Electricity Authority (NEA) to make it competitive and efficient for energy market development. Likewise, the Butwal-Gorakhpur, Inaruwa-Purnia, Dhalkebar-Muzaffarpur-Sitamadhi, Lamki-Dododhara-Bareilly, Lamahi-Lucknow, Nijgadh-Motihari and Chilime-Kerung cross-border transmission lines have been given high priority.
Warning that the government would always be positive towards the genuine investors but would be harsh against the tendency of making excuses without going for the project construction, the Minister expressed the hope that the tendency of capturing projects would be controlled by ending the license raj.
He concluded his speech by extending best wishes for the success of the 24th annual general meeting and eighth convention of IPPAN.
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