Most of hydel project are at risk: NEA

Managing Director of the Nepal Electricity Authority (NEA) Kul Man Ghishing Friday said that most of NEA's hydropower plants are at high risks.

"Insurance is the best way for the risk management. Therefore there need a great awareness among the developers about the insurance options they can buy. At the same time, insurance companies also should enhance their capacity so as to provide insurance facility to large hydro projects," he said while addressing a workshop on 'Importance of construction insurance in hydro and infrastructure: Its understanding and practice in Nepal'.

The workshop was jointly organised by the Hydroelectricity Investment and Development Company Limited (HIDCL) and Nepal Hydropower Association (NHA) with an aim to create awareness among all stakeholders about the importance of insurance in hydroelectricity construction site or projects.

144 MW Kaligandaki Hydel Project. Photo: ADB

"We wanted to provide proper insurance procurement and management knowledge to the concerned parties and create interest among all stakeholders to be responsive towards insurance," said Chhabi Raj Pokharel, chief executive officer (CEO) of the HIDCL.

He stated that insurance was a way to save the investment, therefore policy makers and regulators should pay due attention towards it.

CEO of Premier Insurance Company Sudhyumna Upadhyaya said that insurance was required during construction and operation of the hydropower companies.

"They can buy insurance policies like Contractor's all risk, Contractor's plant and machinery, Marine transit, Erection all risk, and Advance loss of profit during construction, and Fire and allied insurance, Machinery breakdown insurance, and Consequential loss insurance (fire and allied, and machinery breakdown) during operational phase," he said.

According to Upadhyaya, price of insurance policies was determined by the location of the project, soil and rock condition, flood records, and re-insurance market capacities.