Government Allocates NPR 114 Billion for Energy, Water Resources, and Irrigation Ministry in FY 2083/84

Kathmandu. The government has allocated a budget of NPR 114 billion 2 crore 2 lakh for the Ministry of Energy, Water Resources, and Irrigation for the upcoming fiscal year (2083/084).

The government has given top priority to the energy sector in the budget for the upcoming fiscal year. Based on this priority, the Ministry of Energy has published its annual program and budget. The annual program and budget published by the ministry have allocated the budget into two main pillars: energy and water resources and irrigation.

Out of the total budget allocated to the ministry, NPR 70 billion 12 crore 46 lakh has been set aside for the energy sector and NPR 43 billion 90 crore 36 lakh for the water resources and irrigation sector.

This budget aims to accelerate the construction of national pride hydroelectric and irrigation projects, expand the transmission line network, and advance river basin-based multipurpose projects.

According to the annual development program presented by the ministry, the target is to add an additional 1,040 megawatts of electricity to the national grid in the upcoming fiscal year. The government has also set a target to reach a total installed capacity of 5,535 megawatts within the upcoming fiscal year.

The ministry stated that the target is to increase per capita electricity consumption from 479 kilowatt-hours to 511 kilowatt-hours. The program aims to increase transmission lines of 66 kV and above from 7,400 circuit kilometers to 7,700 circuit kilometers. Additionally, the target is to limit system leakage to 12.03 percent.

The government has set a target to expand irrigation facilities to an additional 15,776 hectares of land within the upcoming fiscal year. 70 kilometers of embankments will be constructed on large and medium rivers, reclaiming 210 hectares of land.

In the context of approximately 42,000 megawatts of hydroelectricity production capacity being economically and technically feasible in Nepal, the government has adopted a policy to move forward by implementing the energy development roadmap.

Key Projects and Budget Allocation for the Energy Sector

Out of the total NPR 70 billion 12 crore budget for the energy sector, a significant portion has been allocated to large hydroelectric projects, strategic transmission lines, and the modernization of the electricity distribution system.

To ensure electricity supply during the dry season for the country's energy security, reservoir-based projects have been given special priority.

The largest allocation of NPR 6 billion 15 crore has been made for the under-construction Tanahu Hydropower Project (140 MW), a reservoir-based project.

NPR 4 billion 24 crore 59 lakh has been set aside for the Dudhkoshi Reservoir Hydropower Project, which is being developed as a national pride project.

NPR 1 billion 50 crore has been allocated to advance the work on the much-discussed Budhi Gandaki Reservoir Hydropower Project on a company model.

NPR 4 crore 15 lakh has been allocated for the semi-reservoir type Upper Arun Hydropower Project.

NPR 1 crore 20 lakh has been set aside for the study and continuation of the Pancheshwor Multipurpose Project, while NPR 29 crore 27 lakh has been allocated for the Budhiganga Hydropower Project.

Transmission Lines and Distribution System

Along with electricity generation, billions have been allocated for transmission lines to deliver the generated electricity to consumption centers and border crossings. NPR 11 billion 29 crore 62 lakh has been allocated for this project to make the electricity distribution system reliable.

NPR 2 billion 3 crore 55 lakh has been allocated for the construction of transmission lines under the National Transmission Grid Company Limited, including the Karnali, Bheri, and Arun corridors.

NPR 1 billion 62 crore has been set aside for cross-border transmission lines, including the Nepal-India electricity transmission line project Hetauda-Dhalkebar-Inaruwa 400 kV transmission line.

Other major transmission lines include NPR 2 billion 30 crore for Lekhnath-Damouli 220 kV line, NPR 2 billion 30 crore for New Butwal-Lamahi 400 kV line, NPR 2 billion 3 crore 65 lakh for SASEC Power Transmission and Distribution System Strengthening, and NPR 16 crore 16 lakh for Chilime-Trishuli 220 kV line. The total budget for overall projects of 132 kV and other transmission line expansions is over NPR 21 billion 61 crore.

Alternative Energy and Rural Electrification

NPR 2 billion 23 crore 40 lakh has been allocated for the promotion of clean energy and rural electrification. This includes programs such as solar pumps, mini-grids, and biogas.

NPR 13 crore 14 lakh has been set aside for community and other rural electrification.

Key Projects and Budget for Water Resources and Irrigation Sector

With the objective of providing year-round irrigation facilities to agricultural land and increasing productivity, the NPR 43 billion 90 crore allocated to water resources and irrigation has been focused on transformative projects, inter-basin water transfer (diversion), and river control.

River basin-based multipurpose diversion projects are considered game-changers for the irrigation sector, and budget has been allocated accordingly.

NPR 2 billion 9 crore 53 lakh has been allocated to accelerate the construction of the Sunkoshi Marin Diversion Multipurpose Project. NPR 2 billion 4 crore 55 lakh has been set aside for the Bheri-Babai Diversion Multipurpose Project.

NPR 3 billion 16 crore 22 lakh has been allocated to rapidly advance the Rani Jamara Kuleria Irrigation Project, including system modernization.

NPR 2 billion 55 crore 46 lakh has been allocated as budget for Sikta Irrigation, which is expected to transform the agricultural sector in Banke.

NPR 2 billion 55 crore 79 lakh has been allocated for the Babai Irrigation Project targeting Bardiya.

NPR 1 billion 97 crore 21 lakh has been allocated for the Mahakali Irrigation Project. NPR 1 billion 56 crore 99 lakh has been set aside for the Terai-Madhesh Groundwater Irrigation Program to provide irrigation through tube wells in the Terai districts.

NPR 63 crore 19 lakh has been allocated for Sunsari Morang Irrigation (Third), NPR 53 crore 69 lakh for Bagmati Irrigation Project, and NPR 5 crore 23 lakh for Praganna and Badhkapath Irrigation Projects.

River Control and Disaster Management

The ministry has allocated a significant amount to mitigate the increasing risks of floods, landslides, and erosion due to climate change.

NPR 4 billion 60 crore 2 lakh has been allocated for various river control projects across the country. This includes programs for constructing embankments on rivers such as Triyuga, Bakraha, Lal Bakaiya, Koshi, and Kamala.

NPR 30 crore 9 lakh has been allocated for the Water Induced Disaster Prevention Technology Project. NPR 16 crore 20 lakh has been set aside for river control in the Madhesh and Lumbini provinces.

NPR 33 crore 50 lakh has been allocated for priority river basin flood risk management.

Fiscal Transfer to Provinces and Local Levels

In line with the spirit of federalism, the ministry has arranged for a large amount of funds to be transferred to provinces and local levels as conditional grants for the development of water resources and irrigation from the grassroots level. In the fiscal year 2083/084, a total of NPR 7 billion 95 crore 63 lakh will be sent as conditional grants to the provinces.

NPR 3 billion 30 crore has been allocated for the Irrigation Modernization Enhancement Project, NPR 1 billion 59 crore for the Water Induced Disaster Prevention Technology Project, and NPR 3 billion 5 crore for maintenance projects to be allocated to the provinces.