Kathmandu, July 13

Secretary at the Ministry of Energy Hariram Koirala Friday stressed the need to sign a power trade agreement with India as soon as possible to resolve the mounting problem of power shortage in Nepal.

Stating that there was a big power crisis in Nepal, secretary Koirala hoped that the power trade agreement between the two friendly countries could help resolve the crisis.

He said that the Indian government had already agreed to sign the deal.

He said, "Discussions at the ministry and secretary levels are in progress. The Ministry has been working to expedite the process for such an agreement as soon as possible."

He said that the Ministry of Energy was effortful to operate multi-fuel plant in the Western region which could solve the problems of the industrial sector in the region.

He said that the Nepal Electricity Authority (NEA) and the private sector should join hands to operate the multi-fuel plant in the region where it could generate around 35MW electricity.

He informed that the Ministry of Energy has been lobbying with the Prime Minister and the Ministry of Finance to bring such a fuel plant into operation soon.

Stating that the country has been suffering from lengthy power outages during the dry season, he said that every one should give due priority to construct the national interest hydropower projects to address the problem of the power outage.

He further said that the NEA should reform its organizational structure and introduce sound and effective financial reform measures along with an increase in the existing electricity tariff to enhance its capacities.

Mentioning that the NEA has been working to reduce the leakage of electricity, he claimed that the leakage was reduced to 27 per cent from 29 per cent this year.

The NEA would enhance its capacities in order to reduce the power leakage in the years to come, he said.

Talking about the cancellation of the licenses issued by the NEA, he said that he would cancel the license of those companies which had not done any work for the last five years.

Mahendra Lal Shrestha, managing director of NEA, expressed his commitment to improve the services of the NEA as per the increment of the tariff of electricity.

He admitted that the NEA had failed to provide services to the people and to enhance its capacities to generate more power due to its poor financial health.

He further said that the NEA would enhance its capacities to reduce the electricity leakages gradually.

Shrestha said that the NEA was also effortful to expand the transmission and distribution lines for supplying electricity effectively to the rural areas.

He hoped that around 50-MW electricity would be connected in the national grid in the coming fiscal year.

Ganesh Subba, chairman of the Electricity Tariff Determination Commission, said that the commission suggested the NEA that it should improve its services and organizational restructure after it increased the electricity tariff by 20 per cent.

He said that they decided to increase the electricity tariff considering the
financial health of the NEA even the consumers were facing power outage.

Suraj Vaidya, president of the Federation of Nepalese Chambers of

Commerce and Industry (FNCCI), called on the government to take initiatives to reduce power outages during the coming dry season.

He said that the productivity of the industrial sector has gone down significantly resulting in severe trade deficit in the country.

The long-hour power outage has also led to an increase in the import of fuel in the country, he said, adding that the import of fuel could be reduced if the country generated power as per national demand.

He said that the private sector was ready to invest in the hydropower sector provided that the government offers facilities and motivated them by issuing loan at reasonable interest rates.

He said that the domestic and foreign investment in the hydropower sector would come if the government reformed the policies relating to power generation and supply.

Welcoming the increase in the tariff, he said that the government should also raise the Power Purchase Agreement (PPA) rates.

Kush Kumar Joshi, former president of FNCCI, said that the NEA should reduce the system losses of the NEA along with increment in the tariff.

He said that the financial health of the NEA would not improve until and unless its system losses were made up.

Gyanendra Lal Pradhan, chairman of Energy Committee of FNCCI, said that government should give subsidy in the hydropower projects as in the petroleum products.

He said that the industrial sector has been suffering from load shedding.

"The industrial sector has been consuming around 45 per cent electricity of the total national power consumption," he informed and said that production of the industrial sector came down by 50 per cent in the last dry season.