Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has said internal consumption of electricity is essential for hydropower to contribute to economic prosperity.

Government is always for encouraging private investments in the energy sector, Finance Minister Paudel said, adding that a plan was required for it. He said it during an event on 'Unlocking Investment' organized by Upaya and the Independent Power Producers' Association of Nepal (IPPAN) in the federal capital on Wednesday.

He reiterated government's commitment to creating an atmosphere conducive to bringing foreign investment in the hydropower sector. "Utmost use of water resources and increased consumption must be emphasized," he said, adding that the government will adopt the policy that promotes multinational companies to invest in Nepal.

The Finance Minister also vowed to solve problems facing this sector.

IPPAN Chair Ganesh Karki complained that the national projects were deprived of loans because the Nepali banks had prioritized loans to mega hydro projects run in foreign investment. "The banks are limiting investment in domestically run hydropower projects, to which the domestic investors are bearing the brunt," he added.

Moreover, he drew the Finance Minister's attention to why the electricity bill was belittling and suppressing the country's private sectors. The discount of vat- Rs 5 million per MW- as promised by the government was yet to be realized.

On the occasion, IFC's Nepal Director Babacar Faye informed that IFC had adopted a policy to promote the private sector in Nepal.

Executive Director of Upay, Suman Rayamajhi, said if his organization had not brought forth foreign investment, the energy sector in Nepal could not make present achievements.