"Nepal is less attractive for hydropower developers due to the lack of competitive fiscal incentives. In such a scenario, it is impossible to meet the government´s new target of generating 25,000 MW in 20 years," Pradeep Gangol, the executive manager of Independent Power Producers Association of Nepal (IPPAN) said.
At an interaction on Friday, Gyanendra Lal Pradhan, executive member of IPPAN and FNCCI, said, "There is nothing new in the budget. But as usual it lacks practical approach." Pradhan added, "We are very good at making policies, but are weak in implementation because our mindset has not changed."
Commenting on the financing side, Pradhan, who was also a member in the previous government´s task force that set 10,000 MW target, said, "If we do not improve investment climate within three years, we will have no one willing to invest in Nepal anymore." He added, "We have not even been able to utilize Rs 200 million that the Chinese government provided. The weakness is ours."
According to Pradhan, the most crucial factor is to give continuity to the policies and programs related to hydropower development. "If we have new policies every time the government changes, how can we develop projects which take at least seven years initially to develop? We need steady policies for at least 10 years at a stretch" Pradhan said.
The private sector has also strongly called for a monitoring mechanism, which includes formation of a separate wing headed by the prime minister which would encourage and help completion of mega hydro projects.
The government proposed Rs 12.69 billion for power sector, which is an increase by 113 percent in comparison to the revised allocation last year. The government has proposed starting 791 MW power generation projects from run-of-river projects -- including 456 MW Upper Tamakoshi, 60 MW Trishuli A, 30 MW Rahughat and 245 MW Naunure project -- this year. Similarly, 1827 MW projects will be undertaken jointly by the government and private sector. In addition, the budget allocated Rs 1.52 billion for small hydro projects which will be implemented through alternative energy program.
Moreover, the new budget has moved the focus to infrastructure development like road and transmission line construction in contrast to priority given to rural electrification by the previous government. "It does not matter what targets we set, it is important that the political commitment is there to develop these projects," Pradhan added.
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