Energy infrastructure in govt priority

Private sector seeks immediate development and upgrade of transmission lines for quality electricity supply

 

Lalitpur, July 16

Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha has said that, alongside increasing electricity generation, strengthening Nepal's transmission and distribution system has become the government's foremost priority.

Addressing an interaction programme on 'Challenges in Energy Infrastructure Development' organised by the Nepal Association of Financial Journalists (NAFIJ) in Lalitpur on Thursday, he said that the country's ageing and inadequate power infrastructure must be upgraded to cope with the rapidly growing demand for electricity.

Minister Shrestha said the government aims to complete the construction of 12 strategically important transmission lines during the next fiscal year. By the end of the current fiscal year, the total length of transmission lines operating at 66 kV and above is expected to reach approximately 7,048 circuit kilometres, with a further 800 circuit kilometres to be added in the following year.

He noted that despite sufficient electricity generation, weak transmission and distribution infrastructure has resulted in power outages and frequent tripping in recent days. Therefore, the government had placed infrastructure development at the centre of its energy policy, he said.

According to Minister Shrestha, the Ministry of Energy, Water Resources and Irrigation (MoEWRI) has planned to allocate around Rs. 80 billion for electricity infrastructure in the fiscal year 2026/27. A substantial portion of the Nepal Electricity Authority (NEA)'s internal resources will also be invested in developing and upgrading power infrastructure.

Similarly, he informed that the government has already begun implementing the Energy Consumption Growth and Export Strategy 2026. Nepal currently records per capita electricity consumption of around 460 kilowatt-hours (kWh), and the government has set a target of increasing this to 1,500 kWh within the next decade.

Minister Shrestha also said that the recent Nepal-India Energy Secretary-level meeting held in Pokhara marked a significant milestone towards Nepal's long-term objective of exporting 10,000 megawatts of electricity to India. He said the meeting had reached important decisions on electricity trade and the expansion of cross-border transmission infrastructure.

He further revealed that the government is preparing to introduce a framework allowing the private sector to construct transmission lines and engage in electricity trading through a wheeling charge mechanism.

 

FNCCI highlights undeclared load shedding

President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Anjan Shrestha, said that despite the government's claim of having eliminated load shedding, industries continue to face undeclared power cuts and poor-quality electricity supply.

He said that industries, particularly those located in the Tarai region, are still unable to obtain electricity of the quality required for industrial operations.

He added that unstable voltage damages industrial equipment, raises production costs and disrupts manufacturing processes.

Shrestha observed that although electricity generation has increased substantially, inadequate expansion of transmission and distribution infrastructure has prevented industries from benefiting fully from the additional supply.

 

IPPAN calls for development-friendly forest policies

President of the Independent Power Producers' Association, Nepal (IPPAN), Mohan Dangi, said that cumbersome administrative procedures and what he described as 'development-unfriendly' provisions in the Forest Act continue to pose major obstacles to Nepal's energy sector.

He expressed satisfaction that the Nepal-India JSC meeting held in Pokhara had agreed to expand electricity import capacity to 1,400 MW and export capacity to 1,650 MW, describing the decision as a major boost for the energy sector.

Despite billions of rupees of private investment in hydropower, he alleged that many projects remain stalled because of restrictive policies under the Ministry of Forests and Environment.

"Nearly 45 per cent of Nepal's land is covered by forests, around 15 per cent consists of high mountain regions, and extensive buffer zones and protected areas have affected projects with a combined capacity of nearly 19,000 MW," Dangi said.

He said that developers are currently required to obtain approvals from eight ministries, 24 departments and more than 200 agencies to implement a single energy project, discouraging investment through excessive bureaucracy.

 

CNI says poor infra undermining industrial growth

President of the Confederation of Nepalese Industries (CNI) Birendra Raj Pandey said that although electricity generation has increased significantly, industries continue to suffer because transmission and distribution infrastructure has failed to keep pace.

He noted that Nepal's installed hydropower generation has recently reached 3,000 MW, with the private sector contributing more than 80 per cent of total production. However, inadequate improvements to transmission and distribution systems have prevented industries from fully benefiting.

Citing the CNI's Industrial Status Report, Pandey said that more than 60 per cent of industries still rely on diesel generators. Voltage fluctuations and frequent tripping continue to increase production costs across the industrial sector.

 

Banks invested Rs. 500 bn in hydropower

Nepal Rastra Bank Executive Director Guru Prasad Paudel said that banks and financial institutions still have substantial capacity to increase investment in Nepal's hydropower sector.

According to him, the outstanding loans extended by banks and financial institutions to the hydropower sector currently stand at around Rs. 500 billion.

"Banks have total outstanding lending of around Rs. 6 trillion. If they were to allocate up to 15 per cent of their loan portfolio to the energy sector, investment could reach Rs. 900 billion," he said. "This means that, even today, banks have the capacity to invest an additional Rs. 400 billion in the sector."

Paudel further said that central bank has introduced special regulatory concessions on the single obligor limit for infrastructure projects such as hydropower plants and transmission lines.

While banks are generally permitted to lend only up to 25 per cent of their core capital to a single borrower in other sectors, the limit has been increased to 50 per cent for energy projects. 

Published in The Rising Nepal daily on 17 July 2026.