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Hydropower Development in Nepal

Deepak Adhikari ()
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Deepak Adhikari: Nepal Rastra Bank

NRB Economic Review, 2006, vol. 18, 70-94

Abstract: Hydropower has been recognised as a sustainable source of energy with almost zero input cost. Its benefits are that it is non-polluting in the sense that it releases no heat or noxious gases, it has low operating and maintenance cost, its technology offers reliable and flexible operation, and hydropower stations have increased efficiencies along with long life. Nepal's huge potential in hydropower is still untapped. Though Nepal has not yet b een able to tap even one percent of its potential electricity capacity and 60 percent of Nepal's population is still deprived of electricity, it is fascinating to note that Nepal's start in 1911 in the hydropower generation almost dates back to a century. As a cheap, renewable source of energy with negligible environmental impacts, small hydropower has an important role to play in Nepal's future energy supply. Accordingly, micro-hydro system is becoming increasingly popular as an energy source in rural Nepal. Use of environmentally- friendly technologies and implementation of sound legal and institutional issues are critical to improve the reach of the population to hydropower. To make the Plan targets in the power sector a reality, directing more resources to the power projects focusing on rural population remains the pre-requisite. The major strategies of the power sector have been appropriately identified as promoting private sector participation in power generation and distribution, integrating rural electrification with rural economic development programs, and strengthening power infrastructure. The immense role of the power sector in contributing to the generation of broad-based, sustainable and high level of economic growth as well as improving the relative competitiveness of the economy both on a regional and global basis makes it imperative that the programs and activities on power sector development as visualized in the plans and policies be given the utmost urgency, priority and focus.

Date: 2006
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