Hydroelectricity is a key tool for reducing trade deficit: DPM Shrestha

KATHMANDU: Deputy Prime Minister and Minister for Home Affairs, Narayan Kaji Shrestha, has underscored the importance of hydroelectricity as a key tool for reducing trade deficit and propelling the country towards prosperity. He affirmed that the government has prioritised this.

Addressing a programme organised to mark the 24th anniversary of the Independent Power Producers' Association, Nepal (IPPAN) in Kathmandu today, Minister Shrestha expressed that the nation's energy sector can only advance through initiatives from both the government and private sector.

He emphasized the necessity of increasing domestic energy consumption, stating that the government is striving to reduce the trade deficit by selling surplus power. He reiterated the government's commitment to creating an investment-friendly environment in the energy sector and said the government is making an effort to fulfil Nepali people's aspirations for economic prosperity.

"The government has prioritised economic prosperity, social justice, and good governance," he stated and mentioned that an Investment Summit is scheduled for the upcoming April, during which relevant bodies will be consulted for legal and structural enhancements to attract foreign investment in the energy sector.

He noted that despite an agreement to export 10,000 megawatts of electricity to India over the next decade, the primary focus remains on increasing domestic power consumption.

On the occasion, Minister for Energy, Water Resources and Irrigation, Shakti Bahadur Basnet, highlighted private sector's contribution of 60% to the country's energy sector. He asserted that the national goal of building a prosperous Nepal can only be achieved through a partnership between the government and private sector.

He reiterated the government's commitment to addressing private sector's demands and moving forward with the appropriate ones. The Energy Minister shared data showing that energy production has increased from 800MW to 3,000MW over the past decade, and electricity now reaches 98% of households.

Minister Basnet urged for a fresh perspective to bridge the gap in energy production between the monsoon and dry seasons. He stressed the need to expedite ongoing projects, prioritise reservoir-based projects, and advance the concept of energy mix. He stated that the government views the energy sector not merely as infrastructure, but also as a fundamental pillar for economic prosperity. He encouraged the private sector to invest without hesitation.

The Energy Minister assured the private sector not to be overly concerned about power purchase agreement (PPA) issues and said the Ministry will facilitate in creating an environment conducive to that.

Likewise, IPPAN President Ganesh Karki stated that the country's energy sector is on a progressive trajectory and called on the government to address issues related to PPA. He also drew the government's attention to addressing the security challenges of the energy sector.