What Ails Nepal’s Power Sector ?

This is a strange contradiction in Nepal: Among the poorest in the world Nepalese are paying one of the most expensive electricity bills. And this too in a country which is blessed by the abundant potential to generate hydroelectric power.

It is said that rivers in Nepal can produce a total of 83,000 megawatts (MW) of electricity. Out of this at least half is economically feasible. That means if Nepal had enough money it could produce electricity far more than it requires. Commercially speaking, this could be exported like any other product. Electricity can be sold to our neighbours next door. And India which faces acute shortage of electricity is the natural sort of markets for Nepali electricity.

But under the present condition of the most expensive electricity due to high production cost, can India be ready to pay higher import bills from Nepal ? Taking 330 million dollars to generate 144 MW power from Kali Gandaki ‘A’ project, the cost of producing one kilowatt (KW) electricity works out to be 2,290 US dollars. This compares with about 700 US dollars per KW in Bhutan, which shares the same topography and other conditions similar to Nepal. On top of it there are reports that the cost of Kali Gandaki ‘A’ will increase which means per KW cost would further go up.

This also explains why the Nepalese people are forced to pay high price for electricity consumers pay an average of Rs. 6.55 per unit to Nepal Electricity Authority (NEA). This again compares with an average of about Rs. 1.29 for Bhutan.

The above comparison is enough to indicate that something is really wrong in Nepal that pushes up the electricity price. It is therefore important for our leaders, planners and technicians to find out the missing link. It’s well known that corruption, delay in decision making and implementation, over head costs and weak Nepali rupees are some basic factors responsible for this. But there is still a grey area for Nepal. If mountainous and poor Bhutan can do it why can’t we ?

Unless Nepal succeeds to reduce the cost and produces cheap electricity the ordinary Nepalese cannot hope to get electricity in their homes. The government’s policy of developing industries will remain incomplete in absence of enough and cheap electricity. Worst of all our dream of becoming a power exporting country will only remain a dream . It is high time that responsible authorities realise and wake -up in time to open up what can be considered as the flood gates to prosperity.

Gaurav Sharma
Kathmandu