KATHMANDU: Stakeholders have stressed the need for an electricity bill that ensures the protection of private sector investment.
At an interaction program on ‘Proposed Electricity Bill 2024 and Protection of Investment,’ organized by the Nepal Infrastructure Journalists Society in Kathmandu on Wednesday, industry experts and officials voiced concerns over provisions in the new bill that could hinder private investment in the energy sector.
Former Energy Secretary Anup Kumar Upadhyaya stated that the prevailing Electricity Act 1992 is more private sector-friendly than the bill currently under parliamentary consideration. He argued that while the existing law has facilitated electricity development through private sector involvement, its ineffective implementation has created challenges.
Electricity Regulatory Commission Chair Ram Prasad Dhital emphasized the need for clear priority criteria in the electricity sector. He advocated for non-discriminatory open access for private investors to ensure a competitive and fair market.
Jivachh Mandal, Joint Secretary at the Ministry of Energy, Water Resources, and Irrigation, warned that without policy mechanisms to protect private investments, the sector would struggle to attract funds. He also highlighted that Nepal is not yet technically free from load shedding, stressing the importance of maintaining a 30 % spinning power reserve.
Former Nepal Rastra Bank Governor Dipendra Bahadur Chhetri pointed out that the bill should address the impact of climate change on Nepal’s hydropower projects, while economist Govinda Nepal suggested that hydropower projects should be developed with high capacity to benefit the 6.5 million investors in the sector.
Financial concerns were also raised by former Nepal Rastra Bank Executive Director Nar Bahadur Thapa, who called for an increase in the banking sector’s investment limit in energy projects from 10 % to 15 %. He argued that this would help meet the government’s energy development targets.
Former Investment Board CEO Radhesh Pant stressed that hydropower projects, despite being developed by private companies, should be treated as state infrastructure, requiring laws that reflect their long-term significance.
Independent Power Producers Association of Nepal (IPPAN) President Ganesh Karki warned that the proposed bill could severely impact private sector investment. He argued that if hydropower projects are subjected to competitive bidding, the fate of 20,000 MW worth of projects—currently being developed with private sector funding—would be uncertain.
International Finance Corporation (IFC) official Bhishma Pandit noted that while most countries allow private sector access to electricity markets, Nepal’s laws reinforce a government monopoly, discouraging foreign investment. Similarly, IPPAN Vice President Uttam Bhlon Lama stressed that Nepal must establish an open electricity market to meet its target of generating 28,500 MW in the next decade.
Deepak Bahadur Singh, Chair of the Infrastructure Development Committee under the House of Representatives, assured that the bill is still under discussion. He urged the private sector not to be discouraged, stating that lawmakers are consulting with stakeholders to ensure an acceptable framework.
“Our intentions toward the private sector are not negative,” he said, encouraging continued dialogue on the bill’s provisions.
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