Nepal has endorsed the Power Trade Agreement (PTA) with India and also inked the Project Development Agreement (PDA) with Indian private company GMR.
Let us take a holistic view at the different challenges that are likely and the possible solutions.
1. Timely execution of the projects – Pancheshwar multipurpose project was halted for long only because of lethargic approach of both governments. Strong political commitment is needed. Talks have been resumed to re-initiate the process to build Pancheshwar project. Many major hydro-power projects in Nepal are delayed because of political differences and opposition in the name of national interest.
2. Political stability is a must for investment in infrastructure. Nepal has been politically unstable which led to policy paralysis and hostile environment for investment. Nepal needs to address the ongoing political conflicts.
3. Need to analyse the possible impact if UCPN (Maoist) forms a government in near future as they are opposing the PTA and PDA.
4. Independent regulatory body and transmission and distribution networks of electricity are required for effective cross border power trade. An independent power grid organization is also needed to turn the surplus power from independent power producers.
5. Need adequate cross border transmission infrastructure to attract private companies.
6. To avoid the unnecessary delay and hassle free administration processes India and Nepal should facilitate single window clearance for hydropower investors.
7. Manage local populations apprehensions that are likely to be created due to environmental problems associated with big multipurpose hydropower projects. Sediment load is one of the major environmental challenges for establishment of hydropower projects. This raises the cost of project also. Assessment of landslide risk at the site and access routes are essential for successful operation of the projects.
