Monday, 14 July 2014

Hydropower gets a huge boost with unveiling of this year budget.

This year budget was unveiled yesterday and hydropower tops the list. Presenting the budget in parliament, Finance minister unveiled plan to completely end load-shedding after three years. According to the budget , the government-owned Upper Tamakoshi, Kulekhani III, Chameliya and Upper Trishuli will be adding 560 MW of electricity within three years while 42 projects being initiated by the private sector will bring in another 628 MW. Here are the outline of this year budget for energy sector.


·         The budget has earmarked Rs 12.62 billion for the electricity generation and Rs 13.55 billion for the transmission line construction.

·         The government has also announced cent percent income tax waiver for projects for the first 10 years and then 50 percent the next five years for the power projects that start electricity generation and connect it to the national grid within fiscal year 2020-21 (2079-80).

·         Developers will also get subsidy of Rs 5 million per MW (Although Ministry of Energy had forwarded grant of Rs. 10 Million per every MW to Ministry of Finance previously). Additional 10 percent subsidy will be given to the projects that connect to the national grid within fiscal year 2017-18 (2074-75).  

·         Unbundling the state-owned Nepal Electricity Authority (NEA) into three separate entities—generation, transmission and distribution.

·         To address the power shortage in the Capital, the government will be establishing solar power plant with a capacity of 25 MW within the next fiscal year.

·         The budget has also come up with a provision for the NEA to purchase solar energy. Individuals or companies producing solar energy in excess of 1 KW from solar panels on their rooftop and transmitting it to the national transmission line will be purchased by the NEA.

·         The government has also unveiled the policy of issuing 50-year generation license to firms if they submit plan to consume electricity generated by their project by opening other industries manufacturing automobile, agricultural equipment, cement, aluminum, chemical fertilizers, information technology and solar technology products, among others.

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