Stakeholders stress on prioritizing infrastructure investment to boost domestic consumption

Kathmandu: Stakeholders have emphasized on the need for boosting infrastructure investments in order to elevate domestic consumption and enhance exports to neighboring countries, targeting to support increase power production.

During the policy discussion program on 'Electricity Trade and Infrastructure' organized by the Society of Nepal Infrastructure Journalists (SIJ) in Kathmandu, speakers urged the government to primary prioritize domestic consumption then shifting focus on exporting surplus power to neighboring countries like India and Bangladesh.

Stating that exporting electricity to neighboring countries is intertwined with geopolitics, Deepak Bahadur Singh, chairperson of the Infrastructure Development Committee of the Federal Parliament, highlighted to accelerate domestic consumption by offering electricity to industries at affordable rates.

Singh pledged that the committee of which he is the chairman will make decisions in the interest of the infrastructure sector without being influenced by political biases.

Singh expressed concerns that the recent geopolitical tensions between India and China could create an uncertain environment for electricity exports, even though India remains the most convenient and suitable market for international electricity trade.

Chairman Singh stressed the importance of organizing occasional meetings, conferences, and discussions with infrastructure experts to help parliamentarians better comprehend this sector.

Thakur Prasad Gaire, a member of the House of Representatives and the Infrastructure Committee, mentioned that he is in discussions with relevant experts to incorporate a "one-door policy" within the new Electricity Act, aiming to eliminate current policy hurdles in obtaining approvals for hydropower projects and transmission line infrastructure construction.

"The electricity bill, approved by the Cabinet, is on the verge of being introduced in Parliament," he stated, cautioning that "During this process, there is a potential risk of certain vested interests attempting to amend the electricity bill. Consequently, there is the significance of collective efforts to ensure the bill is enacted correctly." 

He also highlighted the need to analyze international electricity trade from an economic perspective rather than strategic geopolitics.

In the present situation, he the importance of investing in domestic infrastructure to enhance internal electricity consumption for growth, given the influence of geopolitics on electricity trade.

Pradeep Poudel, a MP and a member of the Infrastructure Development Committee, identified a lack of expertise among the committee's lawmakers in the realm of infrastructure development and investment, which could impede the amend of pertinent bills. He proposed improving knowledge in the infrastructure sector through collaboration with experts to ensure well-informed decision-making in the sector's best interests.

He suggested that the government should adopt a policy of reducing reliance on imported petroleum energy by promoting increased domestic electricity consumption, noting, "I think we are still not clear about whether to prioritize electricity trade or consumption."

Madhu Prasad Bhetuwal, joint secretary of the Ministry of Energy, Water Resources, and Irrigation, said that the primary focus should be on enhancing domestic electricity consumption before considering the export of surplus power to neighboring countries. He also highlighted that India is the foremost market for electricity trade, while electricity trade with China remains more symbolic at this stage.

"We have plans for a total of 11 electricity transmission lines, including one with India at 400 kV," he said.  "Additionally, there are plans for constructing four more international transmission lines. We also have plans for two transmission lines to Tibet, China, at certain locations for electrification purposes, but their implementation will require more time." "We have plans for a total of 11 electricity transmission lines, including a 400 kV line with India," he mentioned.

"Furthermore, we have additional plans for the construction of four more international transmission lines. We also have intentions to build two transmission lines to Tibet, China, at specific locations for electrification purposes, although their implementation will take more time." He stressed that there is no need for excessive concern regarding the situation with China, as Nepal's electricity strategy aligns with the BIMISTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) framework and extends to the nation's transmission grid.

Babita Mishra, joint secretary of the Parliament Secretariat, pledged to review the Electricity Bill being registered in Parliament and provide a report to the Infrastructure Committee, vowing to play a coordinating role to prevent potential bill delays due to a lack of coordination between parliamentarians and relevant agencies.

Mandevi Shrestha, deputy director-general of the Electricity Trade Department, noted an increase in production permit applications following the opening of the Power Purchase Agreement (PPA) for the 1,500 MW hydropower project, with applications extending to both domestic and international transmission line projects.

Prabal Adhikari, director of the Nepal Electricity Authorit Electricity Trade Department, hailed India's approval of purchasing 10,000 megawatts of electricity over a decade from the cabinet and the approval of 110 megawatts from Solu Dudhkosi and Dordi Khola under a mid-term agreement.

He also highlighted concerns about potential cyberattacks on the transmission grid system as a reason for India's hesitancy to buy electricity from Chinese investment projects, as reported in international media.

Ganesh Karki, Chairman of the Independent Power Producers Association, Nepal (IPPAN), emphasized the need for Nepal to develop its own electricity trading strategy, independent of others.

Karki also highlighted the challenges faced by many hydropower projects in Nepal, such as delayed transmission line construction, high bank interest rates, forest policies, land acquisition issues, and local opposition, all contributing to increased project costs.  He stressed the importance of reducing these costs through policy changes.

IPPAN Secretary Kavita Pokharel expressed confidence in the private sector's ability to engage in both domestic and international electricity trade, with several companies already established for this purpose.

Energy expert Satish Joshi suggested that Nepal should focus on managing diplomatic relations with key markets like India and Bangladesh to advance electricity trade. He acknowledged the private sector's success in electricity production over the past two decades.

Saumitra Neupane, executive director of Policy Entrepreneurs Inc. (PEI), highlighted the direct impact of geopolitics on Nepal's electricity business. She informed about the importance of clarity in energy trade with India and Bangladesh, especially given the importation of petroleum energy from India.

Director of PEI Anurag Acharya stressed the need for Nepal to understand and navigate geopolitics effectively while engaging in electricity trading.

Pradeep Gangol, CEO of Power Trade and Energy Exchange, a company established for electricity trading, expressed frustration over delays in obtaining permission to operate due to a lack of clear policies, despite the provision in section 35 of the Electricity Act 1993 allowing private sector involvement in electricity trade.