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APR 17 2014

Indian companies to benefit from Nepal's new hydropower initiative

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 17th APR 2014

It is not only a boon for Nepal, but adjoining India too. While the initiative of International Finance Corporation (IFC) can pull up Himalayan country Nepal's power profile to a much brighter scale, it can also open up a wide and newer business vista for power companies in Nepal's largest trade partner India.

According to Nepal's Finance Ministry sources, following a meeting between Nepal's Finance Minister Dr Ram Sharan Mahat and IFC's Executive Vice-Chairman and Executive Chief Jin-Yong Cai, IOFC has finalized a plan to provide an assistance of around NPR 600 Billion (Eqv. 375 Billion INR) for the development of Nepal's hydropower sector.

The assistance is mainly for development of 3000MW additional hydropower and transmission lines to evacuate and internationally trade the output after internal consumption. Despite having 42,000MW economically viable hydropower potential, Nepal's present production is around 1000MW only, much lesser than its need at peak hour.

The shortage forces the country's national power monopoly, Nepal Electricity Authority, to impose mandatory load shedding that sometimes goes even for 12 hr a day

"Over 40% industrial operations are almost dead due to power shortage," said Nepal's major trade and commerce association members. "The new initiative may alter the scenario," they said.

To revert the situation, Nepal government is on its plan to develop 25,000 MW fresh hydropower and build adequate power evacuation infrastructure by 2030 to have 18,000MW export capability in hand. But, "It is tough for financially crunched Nepal to develop all these alone. So, external assistances from international platform or expertise from countries like India is of great help to us," said Nepal Power Ministry officials.

"Nepal is a major source of green energy and promising field for Indian power developer companies because of many reasons including close vicinity. Thus, any fresh power initiative there is opportunity for Indian companies. We are always keen on shouldering responsibility to harness this," said Mr. A.B.L. Srivastava, Director (Finance) of Indian hydropower major NHPC Limited.

While many Indian power installation agencies are already involved into Nepal's hydropower initiatives through projects like Upper Karnali (900 MW), Marsyangdi II (600 MW), Arun III (900 MW) or Tamakoshi III (650 MW), there are many others interested to get in.


Nepal Nepal Electricity Authority Northern Region NR National Hydroelectric Power Corporation Ltd. Finance Power Upper Karnali Electricity India

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