Government Prioritizes Energy Sector in Governance Reform Agenda

Kathmandu. The energy and water resources sector has been prioritized in the hundred-point agenda unveiled by the government last Friday as part of its governance reforms. According to the Cabinet decision on Friday, various significant steps have been put forward with the objective of accelerating the development of the energy sector.

The government's plans include preparing an energy export strategy within one month, removing obstacles in electricity generation, transmission, distribution, and export, and making decisions regarding pending Power Purchase Agreements (PPAs) and licensing within a maximum of 180 days. The government also aims to implement the electricity export strategy by focusing on markets that fetch high prices, especially during evening peak hours.

Furthermore, the agenda mentions that a roadmap for the structural reform of the Nepal Electricity Authority (NEA) will be prepared and its implementation process initiated immediately. A policy to develop a multi-dimensional financial structure incorporating government, private, foreign, and diaspora investment to ensure long-term financial sources for the energy sector is also included in the agenda.

The private sector has reacted positively to this government initiative. Ganesh Karki, President of the Independent Power Producers' Association, Nepal (IPPAN), stated that the government's goal of making the energy sector a major basis for economic transformation has boosted investor enthusiasm. He mentioned that the decision to open long-stalled PPAs within 180 days is expected to move projects forward. According to him, if the policy to expand private sector participation in generation, transmission, distribution, and export sectors is implemented, it will help resolve structural problems. Confidence was expressed that the commitment to prepare an energy export strategy soon will also aid in expanding energy trade.

IPPAN welcomed the plan to develop a multi-dimensional investment structure for the structural reform of the NEA, strengthening industrial security mechanisms, and managing long-term financial resources. Similarly, an integrated mechanism will be formed under the leadership of the Office of the Prime Minister and the Council of Ministers to end the lack of coordination seen in the water supply and sanitation sector. An "Integrated Water Supply Coordination Taskforce" will be formed, incorporating the Kathmandu Valley Water Supply Management Board, Nepal Water Supply Corporation, and the Department of Water Supply and Sewerage Management, which will submit reform proposals within 30 days.

The government has also put forward a plan to initiate encroachment removal, restoration, and climate change adaptation programs for the protected watershed area of Fewa Lake in Pokhara within three months. Additionally, preparations are underway to present a proposal to the Council of Ministers within two months to submit the Urban Development and Solid Waste Management Bill to the Federal Parliament.