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New Nepal republic proposes building 10,000 MW of hydropower

Finance Minister Baburam Bhattarai presented the annual budget of the new republic of Nepal, establishing as a priority the development of 10,000 MW of new hydropower in the next ten years.

The budget of Nepal's Maoist-led coalition is the first since the tiny mountain nation voted to replace its 239-year-old monarchy with an elected constituent assembly.

Bhattarai told the assembly Sept. 19 that the government hopes to achieve double-digit growth within three years. It hopes to attract large-scale investment to the poverty-stricken country, with a high priority on construction of infrastructure.

�With the launching of a slogan �In clean water lies Nepal's power,' the budget has advanced a policy of utilizing the country's abundant water resources in hydropower, irrigation, and drinking water so as to enable this sector to play a central role in the campaign of building new Nepal,� the finance minister said.

�Specifically, production of 10,000 MW of hydropower in the next ten years and irrigation of the Terai's and Hill's large valleys and fields through the diversion of major rivers are the original program features of this budget,� he added.

Bhattarai proposed 12.69 billion rupees (US$170.8 million) in spending for the power sector, an increase of 113 percent from the previous year.

He said a high-level power sector development committee led by the prime minister is to set objectives for producing the 10,000 MW in new hydro. The committee is to develop a national energy security policy for the next 40 years based on a national consensus.

More than a dozen hydro projects slated to advance

The finance minister said construction would start this year on four run-of-river hydro projects totaling 791 MW: 456-MW Upper Tamakoshi (or Tama Koshi), 60-MW Upper Trishuli A, 30-MW Rahughat, and 245-MW Naumure.

He said works will be initiated to start construction of another six projects totaling 1,827 MW by both government and private sectors: 40-MW Upper Trishuli 3B, 110-MW Tamor-Mewa (or Tamur-Mewa), 127-MW Upper Seti, 300-MW Dudhkoshi (or Dudh Koshi), 500-MW Tamakoshi 2 and 3 (HNN 2/14/08), and 750-MW West Seti. (HNN 11/12/07)

Bhattarai said the 70-MW Middle Marsyangdi project would be completed this year. He added that ongoing projects such as 30-MW Chameliya and 14-MW Kulekhani 3 would be constructed quickly with no shortage of funds for their implementation.

With an emphasis on rural electrification, the minister said 1.52 billion rupees (US$20.4 million) is allocated for small hydropower projects implemented through an alternative energy program.

He added that the current license exemption for hydro projects of up to 1 MW will be extended to include projects of up to 3 MW. The present exemption from an environmental impact assessment will be extended from the current projects of up to 10 MW to projects of up to 50 MW.

Bhattarai said the current value-added tax exemption for hydro projects of less than 3 MW will be extended to include all hydro projects.

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