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Opening Door To Private Investment In Power Transmission
By KTM Metro Reporter
December 16, 2013: the government of Nepal has opened the door to the private investment in the power transmission projects in Nepal, according to the Xinhua news.
The State-run Nepal Electricity Authority (NEA) has said that it has been preparing an action plan on paving the way for attracting independent power producers to construct transmission lines: one of the majors component in the energy production.
"We have begun to prepare an action plan which will define on what basis, under which model and to what extent the role and capital of the private sector can be entertained on the development of transmission lines in the country," NEA managing director Arjun Bahadur Karki told Xinhua on the phone.
According to him, a team has been formed for studying various international models on preparing the most suitable and investor-friendly system to make private investors feel comfortable. The NEA board last week decided to allow private players to invest in transmission line projects following the build-own-operate-transfer (BOOT) model.
"NEA has not been able to develop required length of transmission lines as it has been focused largely on power generation," NEA board member Manoj Mishra told Xinhua. In January this year, the Energy Ministry had decided in principle to allow the private sector to build power lines and ordered NEA to prepare an investment modality and draft a transmission service agreement (TSA). The ministry made the decision after finding NEA was unable to expedite construction of transmission lines.
The government has planned to construct 408 km of transmission lines in its Interim Plan (2010-11 to 2012-13) but NEA has failed to add a single kilometer of the power lines in its network. Moreover, due to the lack of transmission lines, the financially- shaky NEA wasted 50 units of energy worth as much as Rs 420 million (4.35 million U.S. dollars) in the fiscal year 2012.
The independent power developers hailed the private sector involvement in transmission line projects anticipating the decision would make the country's energy sector more dynamic. "The private sector's involvement in transmission line projects will not only break the state monopoly, but will also address the need for transmission line expansion in full speed," said Subarna Das Shrestha, president of the Independent Power Producers' Association of Nepal.
