Already delayed by the first wave of the Covid-19 pandemic and lockdowns, the second wave of the pandemic and subsequent restrictions have pushed hydropower project completion back by nearly two years.
According to the Independent Power Producers’ Association – Nepal, as the project’s completion date has been pushed back, the expected cost of each hydropower project has increased by nearly 20%. (IPPAN).
“Because the expected cost has risen dramatically, hydropower projects have asked the government for assistance, but there has been no positive response,” said Ganesh Karki, Vice-President of IPPAN.
Following the first wave of the pandemic, proponents of hydropower urged the government to waive license renewal fees for two years. “However, the government refused. Despite the fact that the sector has been severely impacted by the pandemic, there has been no positive response from the government,” Karki added.
Despite the Ministry of Energy, Water Resources, and Irrigation forming a committee to study pandemic-hit hydropower projects and provide relief, hydropower stakeholders say the Ministry of Finance did not address their concerns.
“The government also rejected other demands, such as providing interest subsidies and refinancing. This has only added to the burden on hydro projects,” Karki said, adding that the government is willing to import electricity from India but is hesitant to provide relief to Nepalese hydro projects.
Karki provided an example of how the cost of hydro projects increased as a result of the pandemic. “The Shingati Hydropower project was completed two years ago, but the Nepal Electricity Authority (NEA) refused to test it due to the risk of the Covid-19 pandemic. Because the NEA did not conduct testing, the government did not build transmission lines, and commercial power generation was delayed. “All the project had to do was pay interest to the banks,” Karki explained. “The government did not provide interest subsidies to such a project.”
Even though construction has resumed, there are not enough workers on the site, according to Shailendra Guragain, immediate past president of IPPAN. “The construction has resumed with fewer workers because most of them went home following the lockdown,” Guragain said, adding that projects with a generation capacity of 3,000 MW that are nearing financial closure have been impacted by the pandemic.
“The pandemic and recent floods have further slowed hydro projects, but the government has ignored the sector,” Guragain added. “We demanded import relief, interest rate subsidies, and a few other things, but the government is hesitant.”
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