The grant under the Nepal Energy Sector Development Policy Credit program intends to support the country’s energy sector in effective implementation of related regulatory, policies and institutional measures. 

The fund is going to play a key role in strengthening financial viability of the Nepal Electricity Authority (NEA) through the establishment of a regulatory framework that eases electricity trade and restructures NEA encouraging the private sector participation.

“The proposed credit aims to support the restructuring and market reform of the electricity sector to improve governance and performance of electricity institutions, eventually enhancing quality and efficiency in services,” World Bank Country Manager for Nepal Faris Hadad-Zervos said in a statement.

The World Bank’s move gains significance in view of the fact that Nepal is heavily dependent on electricity imports despite its high hydropower potential, to address the power shortage domestically.

This situation persists owing to the large number of yet-to-be-materialized hydropower projects in the country.

“The new credit aims to implement policy and institutional measures to overcome these challenges and help bring about structural reforms in the energy sector, to ensure affordable electricity services and encourage predictability for sustainable investment,” the World Bank release informed.

The World Bank is currently supporting 22 active investment projects in Nepal with USD 2.5 billion assured in commitment from the International Development Association.

With the first credit assistance in 1969 for a telecom project, the World Bank has so far offered
USD 4.75 billion in assistance to Nepal, with USD 3.48 billion in credits and USD 1.27 billion in grants.

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This became evident in one of the recent developments that saw a Japanese firm stepping up its efforts to enter the Nepali gas market as part of its business expansion in Asia.

Tapping on Nepal’s growing energy demand that increased aftermath of the 2015 earthquake, a Japanese LPG distributor Saisan Co. formed a joint venture with Gas One Nepal Private Ltd., thus becoming the first foreign player in the Nepali LPG market besides Indian firms.

Though firewood has been the primary source of fuel in Nepal, there is now a sharp rise in demand for LPG in the country because of its advantages such as stable supply and minimized air pollution compared to wood fuel.

While there are a total of 58 LPG suppliers in Nepal, there is hardly any city gas network even in the capital city Kathmandu.

Despite the high LPG demand among the city’s hotels and restaurants, the city’s diffusion rate is estimated to be only 20 percent leaving scope for further expansion.

Tapping Nepal’s LPG Demand

The LPG demand in Nepal has seen its new high as a result of the Nepal Government’s new economic reforms and recovery efforts aftermath the devastating 2015 earthquake that shook the country’s landscape.

The Japanese firm is keen on tapping the country’s gas demand, which it says has increased from 260,000 tons in 2016 to 300,000 tons in 2017 at an annual growth rate of 10 percent.

According to Satoki Koike, who heads the Saisan’s overseas business division, Nepal has good growth potential like any countries and is most likely to see a 500,000 tons LPG demand in the future.

“We want to provide safe and highly efficient products, so we can gain market trust,” Koike said referring to the locals’ call for safety measures as a result of recently-reported gas explosions in Nepal due to defects in LPG tanks.

The local joint venture is currently operating in the southern regions in the Indian border area and is eyeing the Kathmandu market in the near future.

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The three-day meeting planned under the theme ‘Engineering for Prosperous Federal Nepal’ will see a large number of engineers from Nepal and other parts of the world, said NEA in an official release.

“The theme has been chosen to reflect the sentiment and aspirations of the Nepali engineers towards their tireless effort for the prosperity of people,” informed Hare Ram Shrestha, President, NEA.

The meeting will act as a common forum for engineers belonging to wide areas of expertise, wherein, they will engage in discussions and debates on various innovative ideas on the key issues that can contribute to the national development.

More than 1000 Participants

The convention will witness keynote addresses by various engineers on a wide range of topics such as financing development projects, hydropower advancements in Nepal, policy and planning, effective management and research of heritage sites, country’s energy and water potential, among others.

The ‘Energy and Development Expo’ will be the key highlight of the convention, wherein, various development projects and engineering products and services will be presented.

The event is expected to host more than 1,000 national and international participants.

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