The latest figures presented by the managing director of Nepal Electricity Authority (NEA) Dipendra Nath Sharma show that the country needs the investment to the tune of US $ 2 billion just to ensure that there will be no load shedding. This is at current state and current price.
The figure will likely soar with the time. The investment required is quite huge and beyond the capacity of the government alone.
This provided a logical reason for the government to join hands with the Asian Development Bank (ADB) in holding the two-day Energy Investors’ Conference that ended in Kathmandu on October 14.
There ended the logic. The composition of participants did not show encouraging signs, according to many.
“They should have invited new and prospective foreign investors from abroad. But the faces I see here are not new. I suppose they are listing the Khimti project wallahs as Norwegian, Bhotekoshi wallahs as Americans and Upper Karnali wallahs as Indians. But they are already here even without this conference,” noted a water resource journalist.
Another irony was the invitation and the red carpet welcome accorded – at least in voice – by the senior ministers who also happen to be senior Maoist leaders.
“The very fact that the party that leads the government – the UCPN (Maoist) – is still unable to explain why its cadres run amok through the hydro project sites and why its officials oftentimes raise the wagon of nationalism whenever there is a whiff of deal with India, is a big deterring point. I don’t think one conference is enough to instil confidence in investors,” said a water resource analyst.
The government assured stakeholders that it would take all necessary steps to address the gaps and inconsistencies in the policies and would take immediate steps to make Hydropower Investment and Development Company Limited effective, and undertake restructuring of related institutions.
A list of available projects for private sector investment in the energy sector in Nepal was also showcased. “At present, we have prioritized the storage type projects like Budhi Gandaki (600 MW), West Seti (750 MW), Tanahu (127 MW) and Nausyalgad,” said Energy Minister Post Bahadur Bogati.
But such assurances are not new. In fact, there were a few domestic investors at the conference who were murmuring about the bad treatment they have been meted out.
“We did not want to create a scene. Had we opened our mouths, there would be no investment forthcoming,” said a developer.
According to him, although a couple of developers have been developing hydro projects under the energy emergency plan, they are now unsure about the return to their investment. As per the plan, the developers were assured two things – that the government will ensure there will be transmission line to evacuate the power once they start generating them and that the NEA will sign PPA with them.
“But now that our projects are underway and will start generating two years from now, we see no signs of development of transmission lines. The NEA points to queue of developers wanting to sign PPA,” said the exasperated developer. “On top of that the government has already pocketed millions of rupees as non-refundable charges.”
Having reiterated their firm commitment to minimize current power shortages and create a conducive environment for private investment in the energy sector, the government felt encouraged with the conference.
The Prime Minister Baburam Bhattarai himself gave strong commitment to end any security or other apprehensions.
“You should not have even an iota of fear regarding the security or whether you will be able to repatriate your return from investment,” he said.
On the issue of frequent disruptions of hydro power projects by the Maoist cadres – on the backdrop of similar disruption of Upper Karnali being surveyed by GMR group of India – the Prime Minister was not elaborate in his explanations.
He simply brushed them aside as localized law and order problems.
“There were a few incidents that were not pleasant to any. Those incidents which were sheer violation of laws of the land are not consistent with policies of any political party, let alone the government. The government is resolute in the matter of maintaining law and order everywhere in the country. Sufficient security arrangements will be made in power projects sites wherever necessary,” said PM Bhattarai.
The Asian Development Bank (ADB) highlighted ongoing development assistance to the power sector in Nepal and how its increased focus on private sector-led investment could benefit the hydropower sector.