Hydropower Development: Experience of Nepal Sanjaya Dhungel Senior Divisional Engineer Water and Energy Commission Secretariat Singh Durbar, Kathmandu, Nepal

The Country Landlocked Diverse Physical Characteristics Physiography Plains, Siwalik, Middle Mountains, High Mountains and High Himal Administrative 75 Districts and 5 Development Regions

The Country Two rainy seasons Contd. Two rainy seasons June to September (80% of the total rainfall) Other months (remaining 20% of the total rainfall) Mean Annual Precipitation Ranges from 6000mm to 250mm More than 6000 rivers and rivulets Estimated annual runoff about 220 billion cubic meters

Status on Hydropower Development Potential Hydropower Capacity: 83000 MW Techno-economically Feasible to date: 43000 MW Less than 1.5% (approx. 565MW) has been developed till 2004 Projected Demand for 25 years (2027) in High growth scenario : less than 7000 MW

Challenges for Development Implement Integrated Water Resources Management Principles Develop Hydropower at an affordable price for different users Create Conducive Environment for Private Investment Provide Electricity to rural areas particularly in Hills Create awareness for community participation to develop, operate and manage micro-hydro Strengthen the National Capabilities and Develop expertise Execute, review and refine bilateral/regional treaties concerning water resources

Policy Initiatives Hydropower Development Policy 2001 Objectives: To generate electricity at low cost by utilize the water resource available in the country. To extend reliable and qualitative electricity service throughout the Kingdom of Nepal at a reasonable price To tie-up electrification with the economic activities. To render support to the development of rural economy by extending rural electrification. To develop hydropower as an exportable commodity.

Policy Initiatives Hydropower Development Policy 2001 contd. Policy: Priority to meet domestic demand. Encourage Build, Operate, Own and Transfer Provision of incentives for National and Foreign Investment Thrust for Storage type and multipurpose projects Due consideration to environment impact Encourage micro-hydro at local level

Policy Initiatives Hydropower Development Policy 2001 contd. Policy: Control electricity leakages Provision for risk sharing Restructure the existing institutions Provide reliable and qualitative electricity at reasonable price Facilitation through one window policy Transparent and rational tariff fixing mechanism Encourage demand side management

Policy Initiatives Water Resources Strategy 2002: Policy Principles: Development and management of water resources shall be undertaken in a holistic and systematic manner, relying on Integrated Water Resources Management; Water utilization shall be sustainable to ensure conservation of the resources and protection of the environment. Each river basin system shall be managed holistically; Delivery of water services shall be decentralized in a manner that involves autonomous and accountable agencies (e.g., public, private, community and user based agencies); Economic efficiency and social equity shall guide water resources development and management;

Policy Initiatives Water Resources Strategy 2002: contd… Policy Principles: Participation and consultation with all the stakeholders shall constitute the basic water sector development; Sharing of water resources benefits among the riparian countries shall be on an equitable basis for mutual benefit; Institutional and legal frameworks for coordination and transparency shall be an essential feature of water sector management and Wider adoption of the best existing technologies and practices, and rapid innovation and adaptation of both institutional arrangements and new technologies, shall be ensured.

Policy Initiatives Water Resources Strategy 2002: contd… Targets: Short term (5 years; by 2007): Implementation of the comprehensive Water Resources Strategy provides tangible benefits to people in line with basic needs fulfillment, supported and managed by capable institutions involving all stakeholders. Medium term (15 years; by 2017): The Water Resources Strategy is operationalized to provide substantial benefit to people for basic needs fulfillment as well as other increased benefits related to sustainable water use. Long term (25 years; by 2027): Benefits from water resources are maximized in Nepal in a sustainable manner.

Policy Initiatives Water Resources Strategy 2002: contd… Activities: Develop cost-effective small and medium hydropower to meet domestic demand at an affordable price. Encourage private sector investment in hydropower development and power distribution. Provide increased government support to accelerate rural electrification. Integrate improved social and environmental mechanisms into hydropower development. Encourage power based industries and transportation systems to create markets for large hydropower generation plants.

Policy Initiatives Water Resources Strategy 2002: contd… Activities: Facilitate the flow of funds from the domestic financial sector to the hydropower sub-sector. Strengthen institutional and physical infrastructure for power export. Promote hydropower research and development. Restructure the power utility company.

Policy Initiatives National Water Plan 2004: Prepared to Implement the Activities Identified by Water Resources Strategy Action Programs: Program to develop cost-effective micro, small and medium hydropower . Program to enhance Rural Electrification . Program to Improve Power System Planning . Program to encourage private investment in hydropower development and electric power distribution . Program for Power Sector Reform and Development .

Conclusion Strategies, Policies and Plans are: Simple Transparent Dynamic Follows IWRM Principles Friendly to Private Power Producers

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