Nepal allocates $778 million budget for energy sector

In a US$12.18 billion annual budget unveiled earlier this week, Nepalese Finance Minister Yuba Raj Khatiwada allocated a total of NPR83.9 billion (US$779 million) for the energy sector in Nepal, with an emphasis on hydro and “all types of renewable energy.”

In his budget speech, Khatiwada said, “Emphasis will be given to the development and expansion of hydroelectricity and all types of renewable energy to provide modern energy to all Nepali households as per the demand within the next five years.”

Additionally, the period from 2018 to 2028 will be celebrated as “Energy Decade.”

Regarding specific projects, Tamor (possibly 101-MW Tamor-Mewa), Kankai, Uttar Ganga, Naumure (previously proposed to have a capacity of 245 MW), 1,110-MW Sunkoshi II, 536-MW Sunkoshi III, Kaligandaki and Nalgand were mentioned. Construction work will be brought forward after completion of detailed feasibility studies of these projects. The goal is to operate at least one multipurpose hydroelectric project in each province where they are considered to be viable.

The 1,200-MW Budhi Gandaki hydroelectric plant also was mentioned, with construction work to be begun after completion of the compensation distribution.

Khatiwada said that construction work on the 750-MW West Seti project will commence by mobilizing domestic resources, which appears to contradict earlier reports that the Nepal Electricity Authority and China Three Gorges would construct the project through a joint venture arrangement.

And preliminary work will begin to construct the Chisapani-Karnali Multi-purpose Project. This has a potential capacity of 10,800 MW.

“I have allocated necessary budget to integrate the hydroelectricity of completed electricity projects into national grid system through the transmission line,” Khatiwada said.

Grants will be provided for the production of small hydro and renewable energy to be operated by cooperatives and communities in collaboration with the local level. By the end of fiscal year 2018-2019, he anticipates micro and small hydro generation to reach 33.7 MW, from 30.7 MW up to fiscal year 2017-2018.