January 21: The government has set an ambitious target of generating 28,500 megawatts of electricity in the next 12 years. Both the government and the private sector have expressed their commitment to focus on the production of electricity by declaring the next decade as the 'Energy Decade'. The declaration comes in the wake of the government securing market for Nepal’s energy in India and Bangladesh.

The government plans to produce 28,500 megawatts of electricity by 2035 and export 15,000 megawatts in the international market.

Minister for Energy, Water Resources and Irrigation Shakti Bahadur Basnet made this announcement at a recent programme held in Kathmandu on the occasion of the 24th anniversary of the Independent Power Producers Association of Nepal (IPPAN).

"Until a few years ago, our major concern was that if we could properly utilize the electricity that we produce. But that fear has disappeared with India signing an agreement to buy 10,000 megawatts of electricity from Nepal in 10 years," Minister Basnet said, adding, “Selling electricity is not a big problem now. Therefore, it is not unrealistic to produce 28, 500 megawatts of electricity in this context.”

Stakeholders, however say that the government alone cannot achieve this ambitious plan. They have requested the government to encourage the private sector by amending the laws and policies related to energy production.

Ganesh Karki, president of IPPAN, said that the energy sector is the only basis for the economic prosperity of the country, and there is a need to revise the policies. "Currently, the coordination of one or two agencies is not enough to solve the problem of electricity generation. There is a compulsion to coordinate with 14 different ministries for power generation," President Karki said.

"The law itself should be amended to facilitate all the complicated processes. The government's plan will be successful only if all the work can be done by the Ministry of Energy itself. If this arrangement is not made, the country will not be able to generate 10,000 megawatts of electricity in 12 years.”

In the last one decade, Nepal’s installed capacity of electricity increased from 800 megawatts to 2900 megawatts. It includes 2,154 megawatts of electricity from 167 projects of the private sector. According to IPPAN data, more than 76 percent of Nepal's electricity grid capacity is contributed by the private sector. Likewise, the access to electricity has increased from 55 percent to 98 percent during this period.

Rs 6217 billion required to meet the target

It is estimated that an investment of Rs 6217 billion (USD 46.5 billion) will be required to fulfill the ambitious goal of the government. The Energy Development Roadmap and Action Plan, 2080 has estimated that the aforementioned amount of investment will be required to reach the installed capacity of electricity of 28,500 megawatts by 2035. The government plans to contribute USD 6 billion dollars and raise investment of USD 10 billion from domestic banks and financial institutions, USD 8 billion from the Nepal Electricity Authority and USD 2 billion from the Climate Fund. Similarly, the government plans to raise USD 12 billion from Nepalis employed in foreign countries and non-resident Nepalis and USD 8.5 billion through foreign investment, grants and loans.