Budget Watch: Series 11

Hydropower is not only about energy production for productive sectors but also a powerful means of bringing in socio-economic transformation and development as it brings in a number of development initiatives in the villages. It brings electrification programmes, rural road and bridge construction activities, health support programme, awareness programmes, school support programmes, job related training and capacity building programmes, contracts to the local suppliers or service providers and tax income, greening programme.
However, all these definitely require policies for effective results. Another major benefit of hydropower is employment generation. During construction, a significant proportion of the investment goes to the villagers as labour fee, buying local production and raw materials, significantly contributing to uplift the rural economy. Besides, making the local populace shareholders help empower and uplift their living standard.
Once NEA used to campaign urging people to 'use electricity for cooking' to maximize the domestic use of electricity. But those golden days did not last long. Due to subsidy being given to kerosene and LPG, people preferred petroleum products to electricity as the cheapest sources of energy. The decision of government to subsidise petroleum product was a big mistake, electricity limited to lighting actually murdered many big projects.
The price of fuel is sky rocketing in the global market. Nepal is also facing the brunt of it with energy consumption getting expensive and scarce every day. As energy is one's basic needs, Nepal is spending around Rs 300 billion to buy energy. Nepal has been spending a huge money to buy petroleum products.
Thus, Nepal needs to emphasise and focus on power export besides the domestic market-oriented projects. However, the export projects might contribute to local resource mobilisation and help uplift national economy but they will not help reduce the load shedding problem.
Therefore, while the pace for export projects is being speeded up, there is also a need for commitment and initiatives to advance projects for domestic consumption.
Nepal has not been able to win the confidence and increasingly attract domestic and foreign investments in hydropower sector. The past mistakes and hydropower policies of the previous governments have not been meaningfully absorbed by successive governments to seriously work for its sustainable development.
Various short-term and medium term solutions plus local projects for domestic consumption are essential to solve the power crisis. The state should take a proactive role to create and foster congenial environment and push private sector with the sole responsibility to meet domestic market energy needs.
Similarly, to meet the rural energy needs, small hydropower projects need to be constructed. A congenial environment needs to be fostered to encourage the villagers to use electricity from small hydropower projects (2-4 MW) as the preferred source of energy to kerosene or wood.Likewise, construction of medium sized projects of 100-MW in the small townships and cities and big projects of 150-MW in the commercial and industrialised pockets should be initiated by the government apart from seriously considering the energy export option.Politically, there is a lack of forward movement in hydropower sector due to over politicisation.




Gynendra Lal Pradhan,
Patron,
Hydro Solutions