Hydropower Development: Experience of Nepal

1. Hydropower Development: Experience of Nepal Sanjaya Dhungel Senior Divisional Engineer Water and Energy Commission Secretariat Singh Durbar, Kathmandu, Nepal

2. The Country • Landlocked • Diverse Physical Characteristics • Physiography • Plains, Siwalik, Middle Mountains, High Mountains and High Himal • Administrative • 75 Districts and 5 Development Regions

3. The Country Contd. • Two rainy seasons • June to September (80% of the total rainfall) • Other months (remaining 20% of the total rainfall) • Mean Annual Precipitation • Ranges from 6000mm to 250mm • More than 6000 rivers and rivulets • Estimated annual runoff about 220 billion cubic meters

4. Status on Hydropower Development • Potential Hydropower Capacity: 83000 MW • Techno-economically Feasible to date: 43000 MW • Less than 1.5% (approx. 565MW) has been developed till 2004 • Projected Demand for 25 years (2027) in High growth scenario : less than 7000 MW

6. Challenges for Development • Implement Integrated Water Resources Management Principles • Develop Hydropower at an affordable price for different users • Create Conducive Environment for Private Investment • Provide Electricity to rural areas particularly in Hills • Create awareness for community participation to develop, operate and manage micro-hydro • Strengthen the National Capabilities and Develop expertise • Execute, review and refine bilateral/regional treaties concerning water resources

7. Policy Initiatives • Hydropower Development Policy 2001 • Objectives: • To generate electricity at low cost by utilize the water resource available in the country. • To extend reliable and qualitative electricity service throughout the Kingdom of Nepal at a reasonable price • To tie-up electrification with the economic activities. • To render support to the development of rural economy by extending rural electrification. • To develop hydropower as an exportable commodity.

8. Policy Initiatives • Hydropower Development Policy 2001 contd. • Policy: • Priority to meet domestic demand. • Encourage Build, Operate, Own and Transfer • Provision of incentives for National and Foreign Investment • Thrust for Storage type and multipurpose projects • Due consideration to environment impact • Encourage micro-hydro at local level

9. Policy Initiatives • Hydropower Development Policy 2001 contd. • Policy: • Control electricity leakages • Provision for risk sharing • Restructure the existing institutions • Provide reliable and qualitative electricity at reasonable price • Facilitation through one window policy • Transparent and rational tariff fixing mechanism • Encourage demand side management

10. Policy Initiatives • Water Resources Strategy 2002: • Policy Principles: • Development and management of water resources shall be undertaken in a holistic and systematic manner, relying on Integrated Water Resources Management; • Water utilization shall be sustainable to ensure conservation of the resources and protection of the environment. Each river basin system shall be managed holistically; • Delivery of water services shall be decentralized in a manner that involves autonomous and accountable agencies (e.g., public, private, community and user based agencies); • Economic efficiency and social equity shall guide water resources development and management;

11. Policy Initiatives • Water Resources Strategy 2002: contd… • Policy Principles: • Participation and consultation with all the stakeholders shall constitute the basic water sector development; • Sharing of water resources benefits among the riparian countries shall be on an equitable basis for mutual benefit; • Institutional and legal frameworks for coordination and transparency shall be an essential feature of water sector management and • Wider adoption of the best existing technologies and practices, and rapid innovation and adaptation of both institutional arrangements and new technologies, shall be ensured.

12. Policy Initiatives • Water Resources Strategy 2002: contd… • Targets: • Short term (5 years; by 2007): Implementation of the comprehensive Water Resources Strategy provides tangible benefits to people in line with basic needs fulfillment, supported and managed by capable institutions involving all stakeholders. • Medium term (15 years; by 2017): The Water Resources Strategy is operationalized to provide substantial benefit to people for basic needs fulfillment as well as other increased benefits related to sustainable water use. • Long term (25 years; by 2027): Benefits from water resources are maximized in Nepal in a sustainable manner.

13. Policy Initiatives • Water Resources Strategy 2002: contd… • Activities: • Develop cost-effective small and medium hydropower to meet domestic demand at an affordable price. • Encourage private sector investment in hydropower development and power distribution. • Provide increased government support to accelerate rural electrification. • Integrate improved social and environmental mechanisms into hydropower development. • Encourage power based industries and transportation systems to create markets for large hydropower generation plants.

14. Policy Initiatives • Water Resources Strategy 2002: contd… • Activities: • Facilitate the flow of funds from the domestic financial sector to the hydropower sub-sector. • Strengthen institutional and physical infrastructure for power export. • Promote hydropower research and development. • Restructure the power utility company.

15. Policy Initiatives • National Water Plan 2004: Prepared to Implement the Activities Identified by Water Resources Strategy • Action Programs: • Program to develop cost-effective micro, small and medium hydropower . • Program to enhance Rural Electrification . • Program to Improve Power System Planning . • Program to encourage private investment in hydropower development and electric power distribution . • Program for Power Sector Reform and Development .

16. Conclusion • Strategies, Policies and Plans are: • Simple • Transparent • Dynamic • Follows IWRM Principles • Friendly to Private Power Producers

17. Thank You