Lurking in the shadows of the earthquakes.

Several hydropower projects that were affected by the powerful April 25 earthquake are now repairing the damages. While the physical damages are getting rebuild slowly, hydro business is about to face some more obstacles.

I am not talking about the confidence level of investors here. And I do not think investors will stop investing because of earthquakes. Instead, I think it is the right time to invest as we have a history of big earthquakes in every 80 to 100 years. A recent earthquake means we are now safe for 80 to 100 years. 

Unfortunately, the whole incident has woken up the environmentalist and opportunistic. The April 25 earthquake and its aftershocks have triggered landslides in several regions. In addition, a massive landslide that hit Sindhupalchok district last year has created a strong ground for environmentalist to implement additional environmental compliance. 

Even before the earthquake, the lengthy environmental approval process had already affected hydropower adversely.

How lengthy environmental procedures had affected in the past?

Plantation of 25 trees for cutting down one tree is a rule of thumb. There are many cases where the forest department had imposed the ban on felling trees for several months in compliance with the Forest Act-1993 by stating that the monsoon is the appropriate time to grow new plants and herbs in the forests. This has caused a severe delay in transmission line which is the backbone of hydropower.

The likely impact of the earthquake.

Apart from strict environmental compliance, I am afraid there will be a strong resistance and demands from various corners in the name of environment. Below are my predictions.

a) Local People:- As a part of the EIA approval process, developers have to conduct a public hearing. It is one of the toughest tasks to handle because of so many irrational demands. This time around, I think there will be a lot of demands for environmental causes.

b) Ministry of forest and soil conversation:- It is not a new thing for Ministry of forest and soil conversation to impose new fees. For instance, the ministry of forest and soil conservation had decided to impose Payment for Environmental Service (PES) in 2012. According to the decision, the promoters of hydropower projects had to pay up to five percent of their net profit as PES which would be deposited in the Forest Development Fund. This decision, however, did not come into effect as it was strongly opposed by the developers. Similar kind of fees may come into effect in the future.

c) Opportunistic:- A group of people were actively advocating solar and wind energy with little success. This energy is actually no alternative to hydro energy since it is not commercially feasible. 

Now these people have spotted the right time and soon they will creep into action. They will raise their voice to pressurize the government to introduce a new energy mix. Nepal's energy is pretty much dominated by hydroelectricity as of now.

Balanced approach

History shows us that natural resources play an important role in the path from poverty to prosperity. In the context of Nepal, the untapped water resources have a huge potential to completely transform the economy. We should not forget this fact.

The April 25 earthquake and its aftershocks, however, have taught us few valuable things like the need for “Slope Stability Analysis”. The genuine compliance must be incorporated. But adding compliance irrationally in the name of environment is just going to increase the construction cost. This will discourage investors since hydropower has become a costly affair already.

The risk of environmental damages due to development activities like the hydropower construction is unavoidable. After all, development and environment are two sides of the same coin. All we can do is minimize the damages by applying mitigation measures in the best possible way. However, it makes no sense to make this nation hostage to development by imposing high mitigation costs.