Minister urges private sector to invest in reservoir projects

Minister for Energy, Water Resources and Irrigation Pampha Bhusal has urged the private sector to invest in watershed projects. Speaking at the closing ceremony of 'Himalayan Hydro Expo-2022' today, he said that the private sector should be involved in the construction of large reservoir based projects rather than hydropower generation based on river flow (ROR).

"The private sector is not in a position to invest in reservoir projects," he said. Stating that the river flow based hydropower project is not able to generate the required amount of electricity in the dry season and when the production decreases, there will be problems in management, said Minister Bhusal. "The private sector is not able to provide even half of the electricity in the dry season from the project based on river flow," he said.

Nepal Electricity Authority (NEA) has stopped signing power purchase agreements for river-based hydropower projects for the last three years. The government has also given priority to the construction of large reservoir projects to facilitate the management of electricity during the dry season.

According to Minister Bhusal, the government has given priority to reservoir projects like Dudhkoshi, Budhigandaki, Nalgadh and West Seti. He said that the executive director of the Nepal Electricity Authority (NEA) has been given permission to purchase electricity from such projects to expedite the construction of large projects.

India's market is open, Bangladesh's is also opening

He said that the government, private sector as well as foreign investment is being prepared in hydropower to address the growing demand for electricity and convert the wasted water into electricity by selling it in the regional market.

Stating that an agreement has been reached during Prime Minister Sher Bahadur Deuba's recent visit to India to sell Nepal's electricity to India, he assured that the door of electricity trade would be opened in Bangladesh through a sub-regional mechanism comprising Bangladesh, Bhutan, India and Nepal (BBIN). "There is an opportunity to sell the surplus electricity consumed in Nepal to India," said Minister Bhusal. "India's market is open, now Bangladesh's market is also opening."

Permission to trade electricity to the private sector even after bringing the ordinance

Speaking on the occasion, Minister Bhusal clarified that the government is ready to allow electricity trade to the private sector as well. Stating that there is no provision for the private sector to trade electricity in the Electricity Act and the private sector cannot be allowed to formulate working procedures, he said that the private sector will be allowed to trade electricity even if the act is amended through an ordinance.

"We also want to allow electricity trade to the private sector, but where to sell electricity?", He asked. Shailendra Guragain, former chairman of Independent Power Producers' Association (IPPA), complained that the problems of land acquisition, deforestation and purchase agreement could not be resolved during the construction of the project. He said that the trend of discouraging the private sector and stalling private sector proposals should end.