1 / 9

Power Summit 2008 Kathmandu, Nepal September 24th 2008

Risks for Investment in Hydropower Sector in Nepal; Developers’ Perspective. Power Summit 2008 Kathmandu, Nepal September 24th 2008. Presented by: Dr. Sandip Shah IPPAN. Benefits of Private Development. Precious, new money to country Technology transfer Promotes local industry

tarak
Download Presentation

Power Summit 2008 Kathmandu, Nepal September 24th 2008

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Risks for Investment in Hydropower Sector in Nepal; Developers’ Perspective Power Summit 2008 Kathmandu, Nepal September 24th 2008 Presented by: Dr. Sandip Shah IPPAN

  2. Benefits of Private Development • Precious, new money to country • Technology transfer • Promotes local industry • Provides opportunity for small and large contractors to gain knowledge and earn money • Taxes, royalties and revenue to GoN & local governing bodies • Funds for community projects – CSR • Demonstration of environmentally and socially responsible development • Employment and training for technical staff • Reducing burden on GoN • More efficient form of development process • Support to economy at micro, macro and national level

  3. Barriers to Investment • Lack of Political Stability • Policy Stability • Legal and Regulatory Framework • Geopolitics of Region • Security – physical & investment • Institutional Setup • “Single-Window” Policy • Market for generated power • Power Evacuation • Contractual/Commercial Aspects • Level Playing field for IPPs • Financing • Payment Guarantees • Merchant Supply Nepal is still not on the investment map of the World!!!

  4. Risks • Risks for hydropower project development in Nepal: • Technical Risks: • Hydrological • Geological & Geotechnical • Floods • GLOF • Construction Risks: • Delays • Strikes • Flooding • Operational Risks: • Equipment • Sediment • River Flows

  5. Risks • Risks for hydropower project development (contd.): • Contract Performance Risks: • Country Risk • Political Risk -CEN • Policy Risk • Legal & Regulatory framework • Sanctity of Contracts • Security of Site & Investment • Payment Risk • Credibility of buyer • Payment guarantees • Foreign Exchange Risk • Currency Conversion & Repatriation

  6. Risks • Risks for hydropower project development (contd.): • Regulatory Risks • Power Evacuation Risk • Congestion • ROW • Labor Laws • Environmental Risk • Social Risk • Reputational Risk

  7. Risk Assessment • For every risk, there is an associated Return!!! • Perception of Risk • Weightage to different risk elements • Management / Mitigation of Risks • Measures to alleviate the risk • Structural Improvements/ changes – increased reliability • Fire protection systems • Early Warning Systems • Emergency procedures • Security arrangements • Comprehensive CSR Program • Insure against the risk • Insurable risks • Non-insurable risks

  8. Necessary Conditions for Increased Investments • Power Sector Reforms is essential • Rationalize legal framework • Unambiguous, non-overlapping, non-discretionary • Institutional clarity • Proper incentives due respect • Strong, independent regulation • Credit Rating of Country and Off-taker(s) • “Single-Window” Policy more effective • Independent Market/System Operator • Open, Non-Discriminatory Access to Grid • Market-oriented Power Trading • Level Playing Field

  9. Thank you!

More Related