Russia willing to invest in Nepal’s hydropower

Photo Courtesy: Ministry of Energy, Water Resources and Irrigation

Kathmandu: Russia has expressed interest in building a large investment hydropower project in Nepal.

A team led by the Russian Ambassador to Nepal Aleksei Novikov met Minister for Energy, Water Resources, and Irrigation Barshaman Pun at the Ministry on Tuesday and expressed interest in investing in hydropower.

Russia’s two largest banks, Lanta and Moscow Industrial Bank have offered to invest in Nepal’s hydropower, Ambassador Novikov said.

The delegation has stated that it wants to make such an investment in a government-to-government agreement. The delegation led by the Ambassador is interested in the legal provisions related to hydropower generation and distribution in Nepal and the potential of the regional market.

The team was also interested in the possibility of a joint project of electricity and irrigation in Nepal. The Russian delegation also questioned the Minister on whether the electricity generated could be consumed in its own industry.

“Initially, we will invest in a project as a ‘pilot project’ and both the public and private sectors will be encouraged to invest in Nepal by understanding the market situation,” he said.

The regional market is satisfactory: Minister Pun

Minister Pun informed that the government has projected that 10,000 MW of electricity will be consumed in the domestic market of Nepal in the next 10 years. He said that electricity trade agreements have been signed with India and Bangladesh to export the surplus electricity.

Until now, the electricity generated in Nepal has been purchased and distributed by the government company (Nepal Electricity Authority). He said that there is a good environment for foreign investment in Nepal as flexible legal provisions have been made to send the electricity of the project to be exported directly to the foreign market in the coming days.

Referring to the fact that Nepal produces more electricity in the rainy season and less in the winter, Minister Pun said that India-Bangladesh is a reliable market for Nepal as the demand for electricity in the Indian and Bangladeshi markets will decrease when the production of electricity in Nepal decreases.

“The demand for electricity is high in Bangladesh and India due to the extreme heat at that time,” said Minister Pun.

Stating that the current total installed capacity of Nepal is about 1400 MW and the same will be added within this fiscal year, Minister Pun said that 6,000 MW is under construction, 7,000 MW power purchase agreement (PPA) has been signed and 22,000 MW license.

Stating that projects of India, China, Korea and Norwegian companies are under construction in Nepal’s hydropower so far, Minister Pun said that other countries including Australia have also shown interest in investing in Nepal.

Talking about the long history of diplomatic relations between Nepal and Russia, Minister Pun recalled the deep ties in the energy sector as well.

Minister Pun informed that Nepal’s one of the oldest, 2.4 MW Khopasi Hydropower Station in Kavre was constructed 60 years ago with the support of the Russian government and the project is still generating electricity.