Govt. Plans NPR 6.5 Trillion Investment for 28,500 MW Electricity Production

The government plans NPR 6.5 trillion investment to produce 28,500 MW of electricity, with significant domestic economic benefits and key hydropower projects like Dana Khola underway.
January 4, 2025
Govt. Plans NPR 6.5 Trillion Investment

The government has projected that an investment of NPR 6.5 trillion will be required to produce 28,500 MW of electricity.

Out of this, NPR 4 trillion is expected to remain within the country, according to Ganesh Karki, Chairperson of the Independent Power Producers’ Association of Nepal (IPPAN), who stated that such a large-scale investment would have a positive impact.

Karki made these remarks during a financial management agreement signing ceremony for the 49.95 MW Dana Khola Hydropower Project, promoted by Lalupate Hydropower Company. The agreement was signed in the presence of Energy, Water Resources, and Irrigation Minister Deepak Khadka.

Karki emphasized that within ten years, domestic production of materials like cement and steel for hydropower projects would involve NPR 4 trillion in spending, significantly boosting Nepal’s economy.

Recalling Nepal’s inter-country electricity trade, Karki mentioned that it began during former Prime Minister Sher Bahadur Deuba’s tenure with a 400 MW export agreement to India, followed by a long-term deal during former Prime Minister Pushpa Kamal Dahal’s tenure to export 10,000 MW.

He also highlighted the recent commencement of a 40 MW electricity export to Bangladesh and the unveiling of a roadmap to produce 28,500 MW with a 15,000 MW export target, projecting a bright future for Nepal’s energy sector.

Karki stressed the need to address existing challenges in the energy sector to ensure its development. He pointed out that progress would remain stalled if steps were not taken to resolve issues such as the halting of public issuance applications for 41 hydropower projects by the Securities Board of Nepal (SEBON), lack of financing from banks, and restrictions on equity funding.

He lauded the Dana Khola Hydropower Project as one of Nepal’s top hydropower initiatives and extended his best wishes to the company for its timely completion.

Among the 4-5 top hydropower projects in Nepal, Dana Khola is one of them, and he wished the company success in completing it on time. Mohan Kumar Dangi, Chairperson of the Lalupate Hydropower, stated that unless water is converted into electricity, the investment in hydropower would be futile, and there is no room for failure in completing the project.

The project has secured a total investment of NPR 9.96 billion, with NPR 740 million raised through local share issuance, NPR 1.74 billion from promoters, and the rest as bank loans. The project will be developed in Nasong Rural Municipality, Manang.

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