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Recently, Nepal government has made a massive increase in the figure of fees Under the Electricity Regulation 1993. Previously, where companies had to pay between Rs. 125 to Rs. 750 for survey license fees will now have to pay Rs 50,000 to               Rs 20,00,000 per year based on the size of their projects. Kantipur online reports:   

Similarly, prospective developers will have to pay a one-time construction license fee in the range of Rs 100,000 to Rs 5 million for projects ranging in size from one MW to over 1,000 MWs. 

This is also a heavy increment from the previous fee of Rs 3,000 to less than Rs 100,000. For projects developed to sell power in the country, construction licenses are issued for a 35-year period, while for export oriented projects, construction licenses are issued for a 30-year period. After the expiry of the licenses, the projects will have to be handed over to the government.

Nepal may be a small country but it has a large water resource. Nepal is situated in the snow covered Himalayan region which is the origin point of many rivers. Every year, more than 220 billions cubic meters of water run through this small country. Nepal has the capacity to produce 83,000 MW of electricity through hydro-power of which very small amount has been tapped. India and China have constructed hydro power plants. USAID also played a critical role in hydro-power electricity production.

According to Anup Kumar Upadhyay, Joint Secertary, Ministry of Water Resources, all new license seekers would have to pay according to the new fee scale and existing license holders will be brought under the new fee scale when they will renew their licenses. In the first six months of this year, Nepal government has issued 141 survey licenses. 

I think, it would have been better if the government officials had raised the fee gradually. I am afraid that such massive increment may discourage the small companies from starting hydro-electric projects. In the long run this would affect the country’s economy.

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