There is a need for good quality, reliable energy in Nepal. About
15% of the population in Nepal has access to electricity, which is available
mainly in urban centres. The national electricity system is forced to implement
periodical load shedding to compensate for supply shortages caused by technical
failures or low river flows during the dry season. These shortages have a direct
effect on the country as they reduce the productivity of all sectors and limit
industrial growth. The energy sector in Nepal remains supply constrained; the
demand for energy is significant and subject to exponential increases if reliable
energy can be made available to consumers.
Technically, the electricity demand can be met through the development of a few large projects or through the development of many smaller ones. Large projects require huge upfront investment. The storage dams required by large projects are susceptible to sedimentation and are difficult to construct due to the steep and unstable Himalayan terrain (Schreier and Shah 1996). Moreover, large projects must presently be developed by foreign companies, as sufficient expertise and financing capacity do not exist in Nepal.
Small projects however, are appropriate to the present situation in Nepal. Small projects do not require storage capacity, and with the exception of turbine manufacturing, the engineering, building, manufacturing, and financing capacity to build small projects does exist locally. Moreover, by building projects such as Nyadi, the local capacity can be strengthened. For example, LEDCO has already created linkages with a foreign turbine manufacturer who is willing to work with a local manufacturer to produce the turbine in Nepal. The skills and technology transferred during the manufacturing of these components will remain with the local industry once the project has been completed and can be reapplied on future projects of a similar or larger scale. In the long run, this will contribute significantly to lowering the production cost of energy nationwide.
Power projects in Nepal remain rather remote and inaccessible to common people. Local people are 'lost' in the momentum of large projects and become indifferent about such efforts as they feel they have little say over how such projects should function. The participation of local people as investors in small projects, such as Nyadi, will not only provide good return to them but will also foster a positive attitude towards development projects. This will contribute to other projects as well and will present a model for the development of the country's most valuable resources through community participation.
The Nyadi and Khudi Hydropower Projects are proof that local industry can and should be encouraged to develop national hydro resources. The project will make a significant contribution to the local community, the national electricity grid, and to the energy industry, and at the same time respect environmental concerns, and generate income for its local investors. Nyadi and Khudi are examples that small hydro in Nepal is a sector where the illusive 'win-win' situation is attainable and that local investors can lead the way.
For more information, please contact our ledco
office in Kathmandu.
Last modified:
8 May, 2005
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