‘Nepal's role is important for clean energy in South Asia’

By A Staff Reporter,Kathmandu, Apr. 19: Finance Minister Barsaman Pun has said that the progress being made in Nepal's hydropower is important for the promotion of clean and renewable energy in the South Asian region.

Minister Pun, who is in the US to participate in the joint spring meeting of the World Bank and the International Monetary Fund, while addressing the session titled 'Renewable Energy Transition in Asia' held in Washington DC, said that Nepal's electricity is not only consumed domestically but also exported to neighbouring India and planning to be exported to Bangladesh. 

According to his secretariat, Minister Pun said that Nepal is trying to fully utilise the potential of hydropower along with solar energy.

"Nepal's progress in the hydropower sector will be important in the promotion and expansion of renewable energy at the regional level," the Finance Minister said, "because the electricity generated will be used not only in Nepal but also in neighbouring countries with high energy demand such as India and Bangladesh." 

Stating that Nepal and India had made an agreement to export 10,000 MW electricity from Nepal to India in next 10 years and the negotiation to export 40-megawatt electricity to Bangladesh from Nepal was close to conclusion, he said that Nepal was a source of clean and important green energy for the South Asia region. 

However, Minister Pun said that there was a need of huge investment in the energy sector to fully utilise the potential of hydropower production.

A big investment in transmission and distribution infrastructure, including international transmission lines, is necessary, he said and added, “Since our internal resources alone are not enough for that, we are appealing to international investors to invest in Nepal's hydropower.”

Minister Pun said that the government was planning to open the way for the private sector in the construction of the transmission line project. 

He said that this provision had been included in the new Electricity Bill which is in the process of formulation. 

He said that Nepal was aiming to produce 28,500 megawatts of electricity by the year 2035, of which 15,000 megawatts are planned to be exported to the regional market.

Finance Minister Pun said that the financial management of the 1,063-megawatt Upper Arun semi-reservoir project under the leadership of the World Bank and the 670-megawatt Dudhkoshi reservoir project under the leadership of the Asian Development Bank was in the final stages.

Minister Pun said that there has been a significant reduction in the import duty of materials required for the construction of hydropower projects, tax on electric vehicles has been reduced, subsidies have been provided for solar panels and the policy of giving subsidies to small hydropower projects has been adopted. 

The government has adopted a policy to increase domestic consumption as the energy consumption of Nepal is less than other countries of South Asia like India, Bangladesh, Pakistan, Sri Lanka and Bhutan.

He said that the total installed capacity of Nepal had reached 3,154 megawatts. The power purchase agreement (PPA) of 9,500 megawatts had been completed so far and another 10,000 megawatts is in the process.

Out of this, 662 MW was produced by the Nepal Electricity Authority, 493 MW by the subsidiary companies of the Authority and the remaining 2,000 MW by the private sector, he said.