- The government has recently taken a strategy for the energy sector to produce 35,000 megawatts of electricity in 12 years.
- 1,224 projects with a capacity of 53,431 megawatts during various stages of project development requires $113 billion worth of investment.
The Independent Power Producers’ Association, Nepal (IPPAN) is seeking long-term loans at cheap rates from FMO, a Dutch entrepreneurial development bank. IPPAN, in a meeting with representatives of FMO, said Nepal’s energy sector needs investments worth billions of dollars. The two firms discussed bringing international investment into Nepal’s energy sector.
IPPAN President, Ganesh Karki, said that the government cancelled the power purchase agreements (PPAs) of 2,600 megawatts (MW) hydropower projects. He said this is due to the failure to manage the necessary funds. Karki added that there is an immense investment opportunity in Nepal’s energy sector. “The government has recently taken a strategy to produce 35,000MW of electricity in 12 years. Nepali banks cannot manage to finance all these projects,” he said.
The Chief Executive Officer (CEO) of FMO, Michael Jongeneel, said that if hydropower promoters in Nepal work by keeping environment, society and governance (ESG) aspects at the centre, FMO wants to bring in large investments to Nepal. Ashish Garg, vice-president of IPPAN, while presenting the statistics of Nepal’s hydropower production and use, said that 1,224 projects with a capacity of 53,431 megawatts during various stages of project development require $113 billion worth of investment.
Presenting statistics on hydropower projects, Garg stated that Nepal still requires an additional $95 billion to finance these projects. “To date, we have invested $5 billion in 191 completed projects with a total installed capacity of 2,900 megawatts. Furthermore, we financed $11 billion for 129 projects currently under construction, with a combined capacity of 7,107 megawatts. Among them, surplus power generated by six projects with a capacity of 4,215 megawatts will be exported abroad,” he added.
Meanwhile, IPPAN Vice-President Uttam Blon Lama emphasised that FMO, either by itself or in collaboration with other international banks and financial institutions, should lead investments in Nepal’s energy sector by providing long-term loans at low-interest rates through Nepal’s banks or directly.