Government Prioritizes Energy, Water Resources, and Irrigation in Upcoming Budget

Kathmandu. The government has given high priority to the Ministry of Energy, Water Resources and Irrigation in the budget for the upcoming fiscal year.

In the budget presented by Finance Minister Dr. Swarnim Wagle in the Federal Parliament, major priority has been given to energy production, transmission, and distribution lines in the coming year. The government has allocated a budget of Rs 85.54 billion solely for the construction of energy production, transmission, and distribution lines. In total, the government has allocated a budget of Rs 114.02 billion towards energy, water resources, and irrigation.

The government expects to bring about a major transformation in the irrigation system to increase the country's energy infrastructure and agricultural production.

The budget for the upcoming year has announced some significant policy reforms in the energy sector. It has announced the realization of the long-discussed restructuring of the Electricity Authority.

The government will divide the authority into three separate companies for electricity production, transmission and distribution, and trade. Similarly, legal provisions will be made to allow the private sector to construct transmission lines and trade electricity in the international market by paying wheeling charges.

The budget also includes an announcement to open PPAs for projects with a capacity of less than 10 megawatts under the take-or-pay method by determining the electricity purchase rate during the dry season at a reduced rate.

In terms of electricity production, the government's target for the upcoming year is to add a total of 1,040 megawatts of electricity to the national transmission system, including 670 megawatts from hydropower projects and 370 megawatts from solar projects.

Nepal's total installed capacity will reach 5,535 megawatts. Through the budget, the government has emphasized innovation by announcing a pilot project for a 2.5 MW Green Hydrogen Plant in Hetauda and the launch of a 100 MW battery energy storage system in the Kathmandu Valley to address the shortage during the dry season.

The upcoming year will see the completion of the Rahughat, Upper Modi A, Upper Modi, Upper Trishuli-3B, and Budhiganga hydropower projects.

Large reservoir and semi-reservoir projects have also been prioritized in the budget. The financial management of Upper Arun, Uttarganga, Chainpur Seti, Tamakoshi-5, and Ghunsa Khola projects will be undertaken, and the contracting process will begin.

The 1200 MW Budhigandaki will be advanced under an empowered authority model, and the financial closure of Dudhkoshi will be completed, and the contracting process will be initiated. Regarding transmission lines, the 400 kV Hetauda-Dhalkebar-Inaruwa line will be completed this year, and the construction of cross-border transmission lines such as Butwal-Gorakhpur and Inaruwa-Purnia will be accelerated, as mentioned in the budget.

Irrigation

Sufficient budget has been allocated to national pride projects in the water resources and irrigation sector to increase agricultural production. The government's target for the upcoming year is to provide irrigation facilities to an additional 15,800 hectares of arable land, bringing the total irrigated land ratio to 64 percent.

Rs 5.63 billion has been allocated for the Babai Irrigation and Bheri-Babai Diversion, while Rs 2.55 billion has been set aside for the Sikta Irrigation Project in Banke. Similarly, Rs 5.13 billion has been managed as a budget for the Mahakali Irrigation and Rani-Jamara-Kulariya projects.

Rs 2.98 billion has been allocated for the Sun Koshi-Marin Diversion project, with the goal of completing the dam and power house construction within four years by re-tendering.

An additional Rs 530 million has been allocated to expand irrigation in five Terai districts through the Bagmati Irrigation Project, utilizing the water coming from this project.

Rs 1.21 billion has been allocated for the Greater Dang Valley and Praganna-Badhkapath irrigation, and Rs 1.83 billion has been allocated for underground irrigation in the Terai-Madhes regions where surface irrigation is insufficient.

Rs 800 million has been allocated for solar-powered lift irrigation in arable terraces in the hilly and mountainous regions, and Rs 440 million has been allocated for the maintenance of old large irrigation systems.