Hydropower could help alleviate poverty

By using its vast water resources to develop hydropower, Nepal could alleviate poverty and reap huge economic benefits, development and water experts have said.

Nepal’s water resources are second only to Brazil's, but according to the Independent Power Producers’ Association (IPPA) 60 percent of Nepal’s population is without access to electricity. A joint study by the Nepalese government and the World Bank published in 2004 said that close to 30 percent of its people live below the poverty line.

According to a local analyst, the Himalayan kingdom of Nepal has developed only 1 percent of its hydropower capacity.

Taranath Sharma, an expert with Himal Hydro, one of Nepal's leading hydropower construction companies, said there was "huge potential", but little had been achieved.

Hydropower engineers and companies estimated that Nepal could generate 83,000 megawatts (MW) of electricity per year by using hydropower stations - enough to meet the domestic demand for electricity and provide a surplus that could be exported, helping transform the country's economy. Experts said there is a growing regional demand for electricity, especially from neighbouring India’s capital, New Delhi, which could take up to 6,000 MW annually.

Photo: Naresh Newar/IRIN

The Maoist rebels have been involved in the peace process with the interim government to end the decade long armed conflict. Now the conflict is over, the country aims to focus more on developing the energy sector. "There is now a good environment - especially for the private sector - to work in developing the country’s hydropower.”

IPPA said that so far Nepal had developed only 600 MW of power. The energy sector’s target is to increase hydropower-generation capacity to 842 MW with 70 MW exported by 2007. By 2017, it aims to generate 2,230 MW with 400 MW exported by expanding its hydroelectric capacity.

At present, however, Nepal has not generated any export revenue from hydropower, and most of its urban areas suffer from regular power cuts. Sultan Hafeez Rahman, the Asian Development Bank's (ADB) mission head, said major policy and management reforms were needed at the government level.

In recent years the ADB helped provide a US $360 million loan to the government to construct the country’s largest hydroelectricity plant, the 144 MW Kali Gandaki A, in western Nepal. It has the capacity to generate more than 840 gigawatt (GW) hours annually and aims to supply at least 1.3 million people this year, according to the Nepal Electricity Authority (NEA).

Photo: WHO/UNICEF

30 percent of Nepal’s population lives under the poverty line, and 60 percent of the population has no access to electricity. By building hydropower stations in several regions, the country hopes to alleviate poverty

Experts hope an end to the country's decade-long conflict will result in further development of the energy sector. The Maoists, who had waged an armed rebellion against the absolute monarchy of King Gyanedra, have been engaged in peace negotiations with the interim government formed by the country's seven national parties after widespread protests ended the king’s direct rule in April.

"There is now a good environment - especially for the private sector - to work in developing the country’s hydropower,” said Surya Shrestha, an hydroelectric expert working with the NEA.

Sharma said the private sector has a significant role to play in alleviating poverty and stimulating economic growth. Himal Hydro had constructed the $138 million, 60 MW Khimti Khola plant, which employed more than 3,000 people between 1996 and 2000. during its construction.

"The government does not have enough resources and always needs to depend on loans and donor assistance," he said.

Experts in the field are concerned that development is happening too slowly. "This will take a long time and depends on the government, but the new leadership seems quite committed, especially on reforming the policy and management," Rahman said. "It would be very costly - socially and economically - if Nepal still did not invest in hydropower now. This is a very significant segment of the country’s economy."