Role of Hydropower Electricity in Economic Development of Nepal

1. Group No. 5
13th Batch GMCS Training
The Institute of Chartered Accountants of
Nepal
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Role of Hydropower Electricity in
Economic Development of Nepal
Presented by:
-Prabina K.C.
-Nisha Aryal
-Rakshya Kharel
-Satyendra Sharma
Satyam
-Sanish Shrestha

2. NAMASTE
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3. What is Hydropower
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 Hydropower or hydroelectricity refers to the
conversion of energy from flowing water into
electricity. It is considered a renewable energy
source because the water cycle is constantly
renewed by the sun.

4. Hydropower Scenario
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 First Hydropower in Nepal 1911 A.D. (500 KW
Pharping)
 Theoretical Potential 83,000 MW
 Technical Feasibility 44,000
MW
 Economically Feasible 43,000 MW
 Electricity Access Percentage 60% (approx)
 Current Generation 800 MW (Mostly
RoR)
 Largest Operation Hydropower 144 MW
(Kaligandaki)
 Construction ongoing More than 2,500
MW

5. Brief on Nepal Electricity
Authority
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 Formed on 16th August, 1985 under Nepal
Electricity Authority Act, 1984.
 Run under the Chairmanship of Minister of Energy
 Current General Manager: Mr. Kul Man Ghising
 Objective: To generate, transmit and distribute
adequate, reliable and affordable power
 Responsibilities: To recommend GON, to determine
and realize tariffs, to meet its objectives

6. Contd…
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 Imports of Hydropower electricity from India
380 MW
Reasons:
 High demand and low supply
 Many hydropower projects are RoR
 Difficulties in financing and timely completion of
major hydro power projects

7. Micro Economic Development
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 “Electricity can transform people’s lives, not just
economically but also socially.”
– CA. Piyush Goyal, Minister, Railways and Coal,
India Construction of different micro hydro power
projects was concluded in Gorkha district from
which a total of 600 kilowatt power has been
generated.
 Life in the villages concerned have been more
comfortable with the completion of different micro
hydropower projects that were constructed in
Kansigaun including Chamakharka, Chhotekhola,
Chhetarkhola, Kashigaun, Buddha Singh, Singure,
projects in Hamshapur, Larkhola and Pandung
Projects in Chhekampar, and Jagat, Hulchukkhola,
among others in Sirdibas of the district.

8. Contd…
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 KADURI, an organization, has provided
financial and technical support to generate
350 kilowatt powers and that as many as
2,000 households have been benefitted them.
 Similarly, other projects recently completed in
Patlekhola of Simjung, Bhutkhola of Gumda,
Myanglung Khola, Naulikhola of Lapu
Hundikhola of Swanra have generated 269
kilowatt power and from these projects 2,500
households have been benefitted.

9. Case Study of Bhutan
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 In 1986-88 commissioned of the 336 MW Chukha
Hydropower. This improved the socio-economic
development by exporting over 75% of generation
to India.
 Direct sale of electricity contributed as high as
about 45% of the gross national revenue during the
8th Plan, mainly from its export to India.
 As per the 2020 Vision Document of the Royal
Government of Bhutan, it is envisaged to add 1,000
MW of hydropower generation capacity by the year
2012 and another 2000 MW by the year 2017.
 100% electrification by 2020
 Bhutan is a country in the path of sustainable
development.

10. Present Scenario in Nepal
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 Although, Nepal has significantly reduced
loadshedding but the sustainability is questionable.
 In the absence of integrity promoting culture at NEA in
the past, Nepalese society had to bear had to dark
hours of loadshedding .
 The genuine fulfillment for demands of electricity still
seems a far cry.

11. 11
Contd…
•Still 30% of the
population do not have
access to electricity.
•Fossil fuel is still used
as a major source of
energy.
•High degree of
dependence on
•NEA has established
Electric Vehicle
Charging System in
Ratnapark.

12. Challenges
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 Under Constitution, licensing and regulation of
hydropower projects are under jurisdictions of three
governments, i.e. Federal, Provincial and Local.
 Management, restoration and rehabilitation of local
affected community.
 Lack of adequate financing and technical support.
 Seismic risks.
 Local political groups.
 Climate and lack of transmission lines, delay in
construction of projects, price hike of construction
equipment, negligence in adjustment of tariff, and
political and legal risks.

13. Encouragements by State
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 100% tax exemption for first 10 years and 50%
for next 5 years on income of hydroelectricity
projects that come into operation within Chaitra
end 2080.
 Hydroelectricity projects operated under BOOT
modality shall be allowed to claim additional one
third depreciation.
 Hydroelectricity projects operated under BOOT
modality shall be taxed at 20%.
 No royalty charged for industries generating
hydroelectricity for their own use.

14. Conclusion
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 Hydro-electricity is our requirement,
 We have water resources in abundance
required for the production,
 Hydro electricity powers the local economy,
 Dollar based PPAs need to be developed to
attract large scale investments, with a clear
policy on determining the rate and
denominations for greater operational clarity.
 There must be transparency in NEA.

15. Contd…
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 Establishment of regulatory body for more
active regulation of hydropower sectors.
 Promote FDI and investment of remittance in
hydropower sector.
 Tax rebates and concessions must be
encouraged to hydro projects in Nepal.
 Social awareness on using low power
consuming devices.

16. Save electricity, play a role in economic
evolution. #Jai Nepal
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Electricity: Keep talking fools :)

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