Capacity to generate more than 83,000 MW of electricity

Nepal has the capacity to generate more than 83,000 MW of electricity from hydro power. Of this, about 44,000 MW is considered economically feasible. At present, the installed capacity of hydro power is less than 1000 MW, less than 2 percent of the total economically feasible potential. Of this, 144 MW or about 26 percent, is produced by private sector independent power producers (lPPs).

Taking advantage of the new policy of welcoming private foreign investment in this sector, three joint-venture companies involving important foreign investors have been generating and selling hydro power on the build-operate-transfer basis for some years now. Several IPP projects are under construction. There are excellent prospects for power exports of significant volume of electricity from Nepal to power deficit India (especially to the northern region).

The time is right to explore the possibilities and invest in it. Moving in this direction would be in line with the increasing trade and economic cooperation between Nepal and India. There will also be significant market for domestic consumption of electricity, with economic growth and business and industrial expansion, as expected. Currently Nepal undergoes periodic load shedding in the dry season. The range of the size of the projects for FDI in Nepal right now in terms of generation capacity and/or the size of investment is very wide, from relatively small hydropower generation schemes to very large hydro-power projects. There is thus a wide range of investment opportunities.