Opportunities, challenges and HDP comments

Opportunities

• Huge potential: Theoretical potential is about 83,000 MW; about 42,000 MW is economically feasible. Only a small part is developed.
• Perennial snow-fed rivers with steep gradient give high head over short distances.
• Growing demand: Domestic demand grows 7-10% per year, and electricity can replace imported fuel (cooking, vehicles, industry).
• Export market: India and Bangladesh have large and growing shortages of power. Nepal can sell the monsoon surplus.
• Economic benefits: Foreign exchange, jobs, revenue, rural development, and low-cost clean energy.
• Private sector interest and growth of domestic financing.

Challenges

• High capital and financing need; delay in financial closure.
• Difficult geology (young Himalaya), landslide, floods, GLOF and earthquake risk.
• Poor access: roads and transmission lines are missing in remote sites.
• Seasonal flow: Large wet-dry difference; shortage of storage projects.
• Delay in permits, land acquisition, forest clearance and local protest.
• Political instability, weak coordination between federal, provincial and local governments, and uncertain power trade agreement with India.
• Lack of skilled workforce and contractors; cost and time overrun.
• Environment and resettlement issues.

Comments on HDP 2001

• Good points: It opened the sector to the private sector, gave a simple licence process, tax and duty incentives, and recognised export and rural electrification.
• Weaknesses: It was silent on storage projects and a clear plan for export. Royalty and tariff were not attractive for some developers. Benefit sharing with the local people was weak. Coordination between the institutions was poor, and the policy did not address the federal structure and climate change.
• Suggestion: The policy needs to be updated to include storage and pumped storage, one-window clearance, transmission, power trade, and clearer benefit sharing.