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Hydropower Project Development Method in Nepal

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 Nepal is blessed with abundant water resources. About six thousand rivers and rivulets in Nepal carry about 225 billion cubic meter of water every year and flow down to Indian Ocean via India. The ample water sources and the geographical variations are extending immense Hydropower potential in the country. Of the estimated 83,000 MW Hydropower potential of the country, it has been assessed that 42,000 MW can be exploited economically. However, Nepal has developed only 2,200 MW (including isolated micro and small Hydropower plants) of Hydropower to date, which is less than 2.65% of total Hydropower potential of the country. The Government of Nepal (GON) has adopted an open and free market policy in order to attract domestic and foreign investment in Hydropower project development.

Hydropower project can be developed in Nepal under BOOT (Build, Own, Operate and Transfer) model for the 30 years of operation (5 yrs construction and 30 years operation, in total 35 years) for the domestic consumption and 25 years for export-oriented projects. From the very initial stage Government Of Nepal (GON) awards the Survey License which
will authorize a developer to conduct detail Feasibility study and environmental study of the project. Once the project is Financially, Technically, & Environmentally feasible; GON undertaking institution Nepal Electricity Authority (NEA) does a Power Purchase Agreement (PPA) with domestic consumption related projects after the consent of Electricity Regulatory Commission (ERC). Then after, GON awards the Generation License to develop the project. Once the developers receive Generation License of project; construction of project can be started. When the construction of project is completed, Under the BOOT model, developer can operate the project for 30 years then after project’s
ownership should be transfer to the GON.

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