Power sector reform
If the Cabinet approves the fourth amendment of the Electricity Regulations Act (1993), it will signal a sea-change in hydropower development in Nepal. If the act is approved, hydropower producers interested in projects of up to 100 MW will no longer be required to get the go ahead of the Ministry of Energy to carry out survey, build power plants and generate electricity. This is rightly being seen as the most important reform in Nepal’s power sector after the government first threw open the doors for the private sector back in the 1990s. The old lengthy and cumbersome six-stage process for the procurement of license of hydro projects discouraged even eager investors, and since the licensing process would have to go through many levels of bureaucracy, contributed to corruption. We are thus pleased at this welcome government initiative to cut red tape, reduce corruption and give new momentum to hydropower development in Nepal. What is surprising is that no one had thought of such common-sense measures before today. Now the Cabinet should promptly approve it. But we believe government responsibility should go much beyond such preliminary approval.
Besides the decision to cut red tape on small hydro projects, there have of late also been other welcome reforms. For instance, last year the government imposed prohibitive fines on private license-holders who were not serious about completing the projects they undertook on time. Scores of such old licenses were cancelled. Such big fines for project delays coupled with the new measure to speed up small hydro projects should together be enough to kick-start our sputtering power sector. But these projects could be even more effective if the government can also closely monitor their progress, every step of the way. And not just monitor. Since these projects are in national interest, with their promise to light up the darkest corners of the country, the government should also facilitate them. This might entail working to bridge the gap between developers and local communities these projects are based in, or monetary incentives for the projects that come on-line before the scheduled completion date. We would also like to see quick transfer of the projects that the government has appropriated from fraudulent developers to new, more competent developers.
The latest reform of devolution of licensing authority from the ministry to the Department of Energy Development will also be applicable to generation, transmission and distribution of electricity. The new regime will also cover solar energy, wind energy, biomass and energy generated from the waste. Thus, if it can be properly implemented, not only will Nepal be a step closer to its dream of achieving energy self-sufficiency, it will also have harnessed this energy through clean, renewable sources. Moreover, the ministry will henceforth be able to train all its focus on national-priority power projects instead of getting bogged down with a mountain of files the many small projects generated. Thus the new scheme is a win-all. Perhaps the secret to energy-sufficiency for Nepal is not ‘bigger is better’ but, to borrow from Mao Zedong, to “let a thousand flowers bloom”.