Nepal to allow private investment in power transmission

    By IANS,

    Kathmandu: The government of Nepal is ready to invite private sector investment in power transmission line projects, an official said here Sunday.

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    The Nepal Electricity Authority (NEA), Nepal’s government owned power monopoly, has been working to prepare an action plan to pave the way for attracting independent power producers to construct transmission lines, a major component in energy production, Xinhua quoted NEA managing director Arjun Bahadur Karki as saying.

    “We have begun to prepare an action plan which will define on what basis, under which model and to what extent the role and capital of the private sector can be entertained on the development of transmission lines in the country,” Karki said.

    The Nepal government has so far allowed the private sector to develop hydropower projects only.

    According to the official, a team has been formed for studying various international models to prepare the most suitable and investor-friendly system to make private investors feel comfortable.

    The NEA board last week decided to allow private sector players to invest in transmission line projects under the build-own-operate-transfer (BOOT) model.

    “NEA has not been able to develop required length of transmission lines as it has been focused largely on power generation,” NEA board member Manoj Mishra said.

    In January this year, the energy ministry had decided in principle to allow the private sector to build power lines and ordered NEA to prepare an investment modality and draft a transmission service agreement (TSA).

    The ministry made the decision after finding NEA was unable to expedite construction of transmission lines.

    The government has planned to construct 408 km of transmission lines in its Interim Plan (2010-11 to 2012-13) but NEA has failed to add a single kilometre of the power lines in its network.

    Moreover, due to a lack of transmission lines, the financially-shaky NEA wasted 50 units of energy worth as much as $4.35 million in the 2012-13 fiscal year.

    The data is much frustrating given the fact that a large number of Nepalis are forced to spend around 12 hours a day in load shedding while industrial units have curtailed a huge volume of production.

    Nepali independent power developers hailed NEA’s preparation to involve the private sector in transmission line projects, anticipating that the decision would make the country’s energy sector more dynamic.

    “The private sector’s involvement in transmission line projects will not only break the state monopoly, but will also address the need for transmission line expansion in full speed,” said Subarna Das Shrestha, president of the Independent Power Producers’ Association of Nepal.

    The Himalayan country, with more than 45,000 MW commercially feasible energy, has been able to tap around 700 MW only at present.