NEA’s ambitious 15-year plan to prioritize large hydropower reservoir projects

KATHMANDU: The Nepal Electricity Authority (NEA) has set forth an ambitious 15-year plan focusing on the development of large reservoir-based hydropower projects across the country. In a strategic move to bolster its infrastructure, the NEA plans to issue premium shares (Initial Public Offerings, IPOs) to gather substantial investments for these projects.

According to the NEA, around NPR 60 billion worth of IPOs will be issued to finance these large-scale hydropower initiatives. The plan includes setting the paid-up capital at approximately NPR 300 billion, with a provision to issue shares to the public by adding a premium to 10 percent of this amount. The share price has been proposed at NPR 125 per unit, including an equivalent amount in premiums.

Under the leadership of Executive Director Kulman Ghising, the NEA aims to shift its focus towards the construction of larger reservoir-based projects rather than smaller hydropower projects. The target is to develop projects with a combined capacity of 15,632 MW within the next 15 years, which will require an estimated investment of over NPR 5 trillion.

To meet the financial demands of these projects, the NEA is preparing to secure low-interest loans, collaborate with foreign investors, and raise additional funds from the public through IPOs. The NEA has also emphasized prioritizing hydropower projects funded by domestic capital through its subsidiaries and associated companies. The focus will be on constructing high-capacity reservoir-based, semi-reservoir, and pump storage projects.

Key projects in the pipeline include the 1,216 MW Khimti-Those-Shivalaya Reservoir Hydropower Project and the 683 MW Sunkoshi III. Financial arrangements are being made to advance large projects such as the Dudhkoshi and Upper Arun.

Among the most significant projects is the 10,800 MW Karnali (Chisapani) Project, which has the potential to become a model project for the South Asian region. The project is expected to cost around NPR 2 trillion. Additionally, the NEA has initiated a detailed study of the Sunkoshi III multipurpose reservoir-based hydropower project.

The government’s plan to move forward with the 1,200 MW Budhigandaki Reservoir Hydropower Project is also a key part of the NEA’s agenda. The construction process for this project is expected to begin by 2081, with an estimated investment of over NPR 360 billion. The NEA aims to complete all these projects within 15 to 20 years.

In addition to these developments, the NEA plans to implement new power purchase agreements, requiring promoters to design hydropower projects that maximize electricity production during the monsoon season.

The NEA has also announced plans to construct high-capacity cross-border transmission lines, such as New Butwal-Gorakhpur, Inaruwa-Purnia, Dododhara-Bareli, and Chilime-Kerung, and complete these projects on time.

Furthermore, the NEA will replace pre-installed meters in 600,000 households in the Kathmandu Valley with smart meters and gradually replace meters across the country with smart meters. The NEA is prioritizing the expansion of the distribution system to ensure electricity reaches every household in the country.

This comprehensive plan is aimed at not only meeting the country’s electricity demand by 2050 but also improving the quality of electricity and ensuring a stable supply in major cities like Kathmandu. The NEA is also preparing the necessary infrastructure to export 10,000 MW of electricity to neighboring countries over the next decade.