Minister of Energy, Water Resources and Irrigation Shakti Bahadur Basnet has urged domestic and foreign investors to participate in Nepal government's campaign to exploit Nepal's renewable resources.

“The government of Nepal is moving ahead with an ambitious target in the power sector. Our plans and programmes are almost taking the shape of a campaign for aggressively harnessing Nepal’s renewable resources. So, I want to request foreign investors to take part in the government campaign,” Minister Basnet said while addressing the session entitled ‘Navigating Nepal’s Renewable Energy Potential’ on Monday.

He said that the government of Nepal is working to create a conducive environment for the issuance of international green bonds by prospective issuers to pull as much foreign resources as possible to speed up the hydropower development in the country as planned.

He said that the agreement signed between Nepal and India to export 10,000 MW of electricity in the next 10 years and advance the process to export electricity to Bangladesh had ensured market of electricity.

“We have a target to consume 13,500 MW of electricity in the domestic market and export 15,000 MW to the neighbouring countries; we need around USD 46.5 billion investment to realise this. So, we need foreign direct investment to achieve this target,” he said.

Dinesh Kumar Ghimire, former secretary of the government of Nepal, moderated the parallel session entitled ‘Navigating Nepal’s Renewable Energy Potential’, organised on the second day of the 3rd Nepal Investment Summit-2024.

Presenting a paper on Nepal’s renewable energy potential, Sagar Raj Gautam said that despite having a huge potential in hydropower resources, the installed capacity of Nepal’s hydropower project had reached only 3,200 MW.

He said that the private sector, both domestic and overseas, had contributed to achieving this hydropower generation and asked them to increase investment to optimise the hydropower generation in the days to come.

He said that the government of Nepal had been creating an investment-friendly environment by amending existing laws and regulations and advancing the process of introducing new electricity act to encourage the participation of the private sector in electricity trade.

Managing Director of Nepal Electricity Authority Kul Man Ghising said that the NEA had been working with due priority for infrastructure development, including substation, transmission lines, and distribution.

"Our focus is to construct infrastructure to strengthen local supply along with cross-border trading. For that, we need a huge investment and I want to request all including, development partners and development finance institutions, to increase investment in power generation and transmission lines as well," he said.

The NEA has prepared a transmission line master plan to increase domestic consumption and export as well, he said.

Appreciating the support of ADB, WB and others for their role in the expansion of transmission and distribution lines, he expressed his hope for continued support in the days to come.

President of the Independent Power Procedures’ Association, (IPPAN) Ganesh Karki urged the foreign investors to increase their investment in hydropower which is Nepal’s major sector for investment.

“Power generation requires significant investment, and the private sector has played a pivotal role in this front. However, beyond generation, enhancing transmission infrastructure is crucial for ensuring the efficient delivery of electricity to consumers. The private sector can play a key role in constructing and maintaining transmission networks within domestic and cross-border regions to improve reliability and reduce losses,” he said.

He said that clear guidelines regarding tariffs, licensing, environmental regulations and project approvals were essential for attracting private-sector investment.

Arjun Kumar Gautam, Chief Executive Officer of Hydroelectricity Investment and Development Company Limited (HIDCL), said that the HIDCL wanted to be a good financing partner for local and foreign developers to proceed with hydropower and complete the projects at low cost.

Stating that the financing modality depended on the nature and size of hydropower project, he said that huge foreign direct investment was a must to harness the hydropower potential of Nepal and achieve the target of generating 28,500 MW of electricity by 2035.

Sujata Gupta, Director of South Asia Team, Energy Sector, Asian Development Bank, said that the ADB had been supporting for maximum generation of energy, development of transmission and distribution lines and cross-border electricity trade in Nepal.

“We are closely working with the institutions of the government of Nepal, including Nepal Electricity Authority and the World Bank for the development of the hydropower sector in Nepal,” she said.

Stating that Nepal dominated hydropower in South Asia, she said that Nepal should diversify its energy mix and support to reduce the use of fossil fuels in the domestic market and region as well.

She assured that ADB would provide continuous support by providing concession loans for capacity development of regulations and harnessing Nepal’s hydropower potentiality.

Similarly, Dzenan Malovic, Senior Energy Specialist, South Asian Region, World Bank, stressed the need to focus on the development of mega hydropower projects, including reservoir-based ones, to ensure energy security not only in Nepal but also in the South Asian Region.

Highlighting Nepal’s government aims to generate 28,500 MW of electricity by 2035 and requirement of about USD 46.5 billion for that, he said that the private sector alone could not arrange such huge investment and the investment from public institutions and Foreign Direct Investment was highly important.

He also stressed the need to encourage the private sector for infrastructure development of transmission and distribution lines to improve the domestic supply system and cross-border power trade.

Stating that the WB had been supporting hydropower development, he assured increased assistance for the development of hydropower in Nepal.

On the occasion, speaking about the progress of the 216 MW Upper Trishuli-I hydroelectricity project being constructed with the direct investment of Korean companies, Youngjin Hong, managing director of Nepal Water and Energy Development Company, said that a stable policy was a must for attracting both domestic and foreign investment in Nepal.

He suggested the government of Nepal ease the procedures while advancing for timely completion of any project. He also said that the government should facilitate in issuing and extending visa for foreigners.

Stating that Nepal had a big potential in hydropower, he said that the government of Korea was preparing to invest in another hydropower project after completing the ongoing one.