Stating that Nepal is currently faced with a national energy crisis, the WB said, “Nepal is experiencing an energy crisis of unprecedented severity, caused by years of under-investment and sharp growth in electricity demand. This long-term problem was exacerbated last year by drought in part of the country and the loss of a transmission line due to flooding that was used to import electricity from India.” [break]
By January 2009, grid-based consumers were being supplied with electricity for only eight hours a day. “This has had a highly negative impact on all aspects of the economy and has imposed a heavy burden on Nepalis,” a press release issued by the bank on Friday said.
The release quoted Susan Goldmark, World Bank Country Director for Nepal as saying, “Increasing access to electricity is one of the major human and economic development challenges facing Nepal.” She further said, “The Bank is stepping up its assistance to help Nepal to minimize economic impacts and hardships in the short term as well as to implement medium to long term development plans.”
Some 36,000 rural households will benefit from the expansion of Nepal´s micro-hydro program.
The additional financing for the Nepal Power Development Project are intended to strengthen Nepal´s power system by increasing energy production through reduction of down-time at the Kali Gandaki ´A´ Hydro Electric Plant; making available an estimated 22 MW of capacity at the existing thermal plants. It will also improve the reliability of the Kathmandu Valley distribution network by adding 500 MW transmission capacity to relay power from existing and expected future projects. An additional 4.25 MW is expected to be installed through the micro-hydro program.
The additional financing is a blend of credit and grant from the International Development Association, the World Bank´s concessionary lending arm.
Focus on costs: Official
Meanwhile, authorities concerned on Friday said government´s immediate priorities should be identification and quick implementation of cost-effective projects on the backdrop of the government declaring a "national energy crisis". They also said that generating electricity at cheapest price requires research and formulating new strategy.
At a program organized by IPPAN (Independent Power producers´ Association of Nepal) in the capital, Sher Singh Bhat, Director of System Operation Department, Nepal Electricity Authority (NEA), spoke on barriers to hydropower development from an institutional perspective.
According to Bhat, power projects can be developed by either private or public sector. "But most important is to create a merit list through river basin study that would identify what kind of and at what cost the projects can be developed. “In this way, we can produce cheap electricity,” Bhat said.
NEA authorities have suggested that such a merit list be included in the five year plan which would determine how much electricity is needed and as per the research, a strategy to invest in cheapest power station can be initiated.
Related story
Global IME Bank secures $25 Million loan from Climate Fund for...
