Small Hydropower Development
Rising Importance

By S.B. Pun

THE 240 Kw Banchare in Dhukuta and the 345 Kw Jhupra in Surkhet were the first generation small hydros to be designed, financed and built entirely with Nepalese resources. Started in the late 1960s both were commissioned in the early 1970s. In fact, these projects were literally, to coin the buzzword, the first BOO plants. The oil crisis of 1973 and the subsequent hike in the prices of petroleum products opened up the eyes of many countries. Nepal was no exception and this led Nepal to look into its own indigenous energy resources, the small hydros. The government also decided to electricity all district headquarters. Whereas the Terai headquarters could be electrified from the national grid, the electrification of the remote hill headquarters necessitated the development of the local small hydros.

The feasibility report of the ten small hydropower plants from Phidim in the east to Khandbari, Bhojpur, Namche, Jomson, Dunai, Chaurjhari, Jumla, Bajhang and Doti in the west were conducted by Norconsult of Norway in 1975.

These ten projects total to a capacity of 1983 Kw and with an estimated total cost of Rs. 471 lakhs work out to Rs. 25,400 per Kw which at the then prevailing exchange rate of Rs. 10 to a US$ results in US$2,500 per Kw. This report gave birth to the Small Hydropower Development Board in 1976 with the Minister of Water Resources as its chairman and the members drawn from various institutions like the NPC, MOF etc.

The actual completion cost of there ten projects of 2530 Kw capacity was Rs. 3,125.8 lakhs which works out to a cost of Rs. 1.24 lakhs per Kw. Without the Austrian financed Namche and the just commissioned Dunai, the other 8 projects of 1,730 Kw cost Rs. 1,081.8 lakhs i.e. Rs. 62,500 per Kw. When one compares the estimated and the completed cost per Kw figures, the following points must be borne in mind: first, the capacity of the plants have been altered slightly with only the Namche making a major jump to 600 Kw from 227 Kw, second, there was a wide spectrum of donors involved in these ten projects: Austria, Yugoslavia, Asian Development Bank, Organisation of Petroleum Exporting Countries, United Nations Capital Development Fund and HMGN of course, third and last, the years of completion of the above ten projects vary widely from the year 2038 to 2050 with Dunai commissioned only recently in 2056. Hence, the cost per Kw as given above need to be looked with quite a pinch of salt.

So what had been estimated to cost as Rs. 25,400 per Kw ended up costing more than two to four times when finally completed. By the middle of the 1980s the figures of US$4,000 to 8,000 per Kw for the development of the small hydros were being bandied about prominently. Around this time, the World Bank was keen to execute the 69Mw Marsyangdi and as the name of the game then was still "bundling" the establishment of NEA in 1985 wiped off the name Small Hydropower Development Board completely from Nepal’s power sector.

The policy and decision makers particularly the National Planning Commission started to disapprove small hydros and this disapproval was translated by the Finance Ministry in its budget. After implementing 31 projects to the tune of about 10Mw, HMGN literally condemned small hydros as the untouchable Sudhras. In fact those who advocated the small hydros were called the Chhudras.

By a strange quirk of fate, NEA with the German GtZ assistance started to conduct a Master Plan Study of Small Hydropower in 1990.

This study identified 38 Grid Connected Projects totaling about 79,000Kw varying in sizes from 250Kw to 8,000kw, most of them at inventory and reconnaissance levels with the cost of US$1,500 to 3,000 per Kw and identified 30 Non-grid Connected Projects totaling about 29,000 Kw of 75Kw to 5,000Kw sizes, most of them also at inventory and reconnaissance levels with US$3,000 to 6,000 per Kw.

At this point in time both government and NEA were more concerned with "things larger". Even the 1992 Hydropower Policy had very time to say on the untouchable "Sudhras." Thus after three yeas with no one listening to them. GtZ was forced to close its shop and the 68 reports collected dust in NEA’s racks.

The mid-1990s was literally the heydays of the medium hydros both public and private sector-wise: be it the screening, ranking and the feasibility studies of seven 10 to 300 Mw projects; the construction of 144Mw Kali Gandaki. A, 14Mw Modi and 6 Mw Puwa in the public sector, or the construction of 60Mw Khimti, 36 Bhote Kosi and the 20 Mw Chilime in the private sector. In fact, the government welcomed Khimti and Bhote Kosi with such open arms that some do not hesitate at all to call this an unholy "la affair". It took some time for the "intricacies" of this "la affaire" to trickle down: 20 year license to operate; Cost Plus approach in the Power Purchase Agreements (PPAs) and the Developers "gold plating" the project cost; take or Pay PPAs necessitating the Backdown of NEA’s own generation; US$ dominated tariff with annual escalation as well; HMGN guarantee in case of NEA payment default and scrow account equivalent to three months’ energy hill.

By and large the Nepalese were not feeling comfortable with the conditionalities of the multilateral donors in the power sector. This was particularly manifested in the struggle for Arun-III where despite the huge tariff increase (60 per cent then 38 per cent and 25 per cent) that HMGN relented to, the project failed to materialise and we are still suffering the after effects with load shedding. But the Khimti and Bhote Kosi "la affaire" has, though belatedly, taught us the lesson that the conditionalities of the private sector is far harsher. In essence, there is no free lunch and one must take this as a blessing in disguise, for without this unholy "la affaire" the "sudhras" will not have been able to raise their heads. Policy and decision makers have now realised that these sudhras are quite content with the flat buy-back rate and are asking neither for a dollar dominated tariff nor a government guarantee in case of a payment default. In fact the "sudhra" is now the favourite boy in everyone’ eyes.

The Khimti and Bhote Kosi "la affaire" must be seen as a blessing in disguise because their harsh conditionalities were instrumental in bringing the rejected ‘Sudhras’ to the fore front. Though the "Sudhras" have raised their heads with four projects that have concluded the PPAs with NEA, there are still difficult obstacles ahead. The major obstacle is the financing part, of course.

Women Women All The Way

By Binita Joshi

THE issues related on children and women should be of highest global concern and responsibility as they are made sensational and sensitising. Talks on children and especially the women are always hot. Even the star studded crown in beauty pageants is placed on the head of the winner on the merit of her spontaneous response and 99.9 per cent of all times, the response is based either on the query regarding the women or the children.

Like the saying "every-body’s room is nobody’s room" and "empty vessels make the most noise" the fate of women has remained unchanged. It could be because of the very saying: "everybody" concern over women issues is nobody’s concern" at all. Woman is one such issue, which is talked by almost everybody from politicians to publishers. Every other newspaper carry news and views on women and almost all political parties come in the forefront with the catchword "more emphasis on women development."

Even our newly appointed prime-minister promised to give more space to women ministers but came up with only one in his cabinet and on top of what garland the portfolio related to women to a gentleman. Even the Constitution of Nepal has reserved 5 per cent of the total seat of House of Representatives for women and they are said to be given 20 per cent of seats at election. Will that be ever put into practice?

This often happens, lots of worldly promises are made when it comes to women, the gender which covers more than 51 per cent of the total population in Nepal but the numerical strength has not yet been able to show the true colors. May be the right time has not surfaced yet.

Lots of issues have been raised to uplift the degrading situation of women. Education, equal human rights, liberalisation...Plenty of words as such are affiliated to women development. Compared to yesteryears today more women are getting education but this does not seem to have changed their fate. They are still marginalised and deprived of employment opportunities, especially when a woman is married and they are always the ones who have been branded as the gender who lack decision making, policy formulating, developing and implementing.

Equal gender rights or gender equality comes with the legislation of equal property rights. Almost the four years’ hard and continuous efforts to bring in changes in the constitutional bias-ness amongst sons and daughters was in vain when the inheritance bill—the property rights to women regardless of martial status and age— lapsed with the dissolve of the House. All those so called women development advocates did not give a second thought. In fact this issue has generated lots of sparks and contro-versies then but today, it has become a stale story. This has boosted the women to gather all their strength once again to bring in a concrete change in their lives and to let the next generation live in peace. The patriarchal structure in the society has been one of the main persistent drawbacks in the development of women in Nepal as our tradition and culture have undermined the women politically, socially and economically.

In order to empower the women, innumerable semi-nars, symposium and conferences take place. The year 1975 marked the first world conference on women, which was convened by UN. This very year was celebrated as the International Women’s Year, which raised the global concern relating to the advancement and develop-ment of women. Later, from 1976 to 1985, the period was regarded as a woman’s decade. World conference on women commenced every five-year since then. Starting from Mexico in 1975 to Beijing in 1995, the efforts to extend dignity and self-respect to the women however have yet to prove significant. The observation of Women’s Day on March 8 year after year, without the accompanying initiatives from the government and related agencies will not give required space to women.

To fulfill the commitment made by the government to the resolution passed by the World’s Women Conference held in Beijing in 1995, the ninth five-year plan (1997-2002) has emphasised women’s development and empowe-rment.

It is true that throughout history women have been granted fewer rights and lower social status than men, but its good that more and more emphasis is being laid upon the improvement of women’s prevailing situation. With so much of hype and attention, the women today should have become the most privileged lot but this is not the case. AS a consolation this could be just another history that’s repeating itself. The reality that the socio-economic situation of the country can never be developed and improved until the unless men and women work together.