January 2007 Vol. I May 2010 Vol. 1 INDEPENDENT POWER PRODUCERS’ ASSOCIATION, NEPAL sector did not shy away during the peak of the insurgency. = Adequate Content; Remarks From The President Now that the political situation is comparatively better, = Relevance to Context; I can feel the vibrancy in the private sector to develop a = Clarity and consistency in internal and external number of projects with greater speed. Communication; We can actually see the impact that the private sector has = Proper Coordination among stakeholders; made in the overall power sector development of Nepal, = Sustained Collaboration among IPPAN members; which is a reflection of IPPAN’s efforts and advocacy = Continued Cohesion among the members; over the years. We can say with pride that IPPAN is now = Proper Code of Conduct in advocacy and business recognized as a major stakeholder in the power sector of practices. Nepal. The achievements are numerous, and I am proud While I handover the baton to the new leadership at to have led an organization with focused objectives, IPPAN, I wish them all success in their efforts. I strongly consistent approach, thorough professionalism, sustained urge the new leadership to remain focused on the advocacy efforts backed by extensive research and objectives of IPPAN, i.e. to support the overall growth analysis, and excellent communication forums. I would of power sector in Nepal, with emphasis on increased like to complement the members for their contributions investments from the private sector. I am not signing in technical, research, analysis and communication efforts off from IPPAN, but I will continue to lend my support and continued advocacy, and to the staff at the IPPAN and guidance to the new team, as and when necessary, secretariat for their thorough professionalism even under because the road ahead is still long and winding, and as Dr. Sandip Shah duress of short timelines. I always quote Robert Frost, I have miles to go before I sleep ……… It goes without saying that the road to business advocacy Eight Years as IPPAN President - in Retrospect over the last eight years was not without its ups and It has been eight years since I took over the mantle of downs. There were times when the future of hydropower leadership of IPPAN. When I look back at the years of development in Nepal, especially through the private my presidency at IPPAN, I am filled with a sense of joy sector, was questionable. Political and legal stability risks, IPPAN’S Vision, Mission, Goal & Purpose and pride at what we have achieved, the momentum we security concerns, growing local expectations, lack of � To contribute to the development of Nepal’s have been able to create in this sector, and the positive interest of financial institutions to fund large projects vast untapped hydropower potential, in line with contribution in real terms that we have made to this in Nepal, lack of adequate transmission capacity, lack of Nepalese aspirations. sector. The journey of achieving greater interest in power access to the regional power markets, etc. were causing sector investments in Nepal has been long and painful, serious concerns in the minds of potential investors. � To help mobilize private capability, both national but I believe this holds good for all emerging economies. Local investors were wary of investing their funds in such and international, to overcome the constraints high-risk, capital intensive projects with less than normal confronting hydropower development. I look back at the last 20 years in the history of Nepal returns. International investors were looking elsewhere � To make optimal use of Nepal’s water resources and see that major strides have been made in opening for investing their funds in safer markets. However, I endowments, to serve long term national and up the economy for private sector investment, especially can confidently say that investor confidence is partially regional needs in the context of future fresh water in development of hydropower projects. Efforts of restored due to the advocacy and championing efforts and energy scarcity. IPPAN in this direction have always been to enlighten of IPPAN through organization of the Power Summits, the policy and decision makers to create a conducive Hydropower Convention and other similar efforts. There environment for private sector investment with sufficient is still a lot to be done in this context, and I am sure, political, legal and regulatory stability along with a safe IPPAN will continue its efforts in a sustained manner and secure working environment. IPPAN has also in the future. worked to encourage the private sector sponsors, In this issue banks and financial institutions, construction industry Having led this business association in a professional Remarks From The President ......................................................1 and equipment manufacturers such that projects are manner, I believe that the new leadership will continue to Interview with Hon’ble Dr. Prakash Sharan Mahat ..................... 2 developed in a technically viable, environmentally friendly, follow the following 10 Cs in the efforts to be conducted Interview with Ms. Nadia Sood ....................................................3 through the organization: socially acceptable and sustainable manner with adequate Interview with Ms. Susan Goldmark ...........................................3 profitability. We have already seen appx. 160 MW hydro Friday Forum ...............................................................................4 generation from the private sector in the last 10 years; = Consistency on views and positions on policies and issues and related efforts; IPPAN Activities ...........................................................................7 however, what encourages me most is the pipeline of Meetings ......................................................................................8 projects that, I believe, can easily add appx. 4000 MW to = Development of Coherent position papers on legal, News from Members ..................................................................10 financial and technical legislation and regulations; the generation capacity in Nepal in the next 10 years. This Member List of IPPAN ...............................................................11 is no mean achievement, given the long period of political = Clarity of thought supported by adequate research uncertainty that we have gone through. The private and analysis for balanced benefit of the sector; IPPAN Newsletter 1 Interview with Hon’ble Dr. Prakash Sharan Mahat, Minister for Energy, Government of Nepal capacity within a short period of time. Therefore, we There are several challenges and constraints because focused on importing power from India to meet the our system is still not working in a harmonious manner. immediate power need. However, we are not able to There are several Departments and Ministries who import maximum power because of the limitation of should expedite power purchase for example, the transmission capacity. Ministry of Environment, Ministry of Forests and Soil Conservation and the Ministry of Finance. There is a We were able to reduce load shedding hours from 18 dire need for more harmonization and coordination. hours to less than 12 hours a day because of demand Similarly there are some rules and acts which need to be side management. As a result we were able to supply changed to meet the coming challenges. There is already more power to the far eastern region and mid eastern a proposed new Electricity Act in Parliament. Hopefully, region. There is almost none or very little load shedding we will be able to eliminate some of the hurdles through in rural areas. the changes in our Electricity Act. Dr. Mahat, what were your main achievements in the power sector in your tenure as the Minister for Energy? What do you think that the Government of Nepal There are problems in local areas in the power project It is very hard to talk about achievements, especially in is doing to reduce the load shedding hours? In your construction sites. The expectations of the local people the power sector. People look for tangible results in opinion, when will the Nepali people face the day are sometimes more than what the project and investors without load shedding? terms of power supply but power supply will not happen can afford. We need to reconcile with this and manage overnight. It takes time but I am very satisfied with what It will take some time to completely eliminate load their expectations. We need to make them feel that we were able to do in terms of laying the foundation shedding with our own power generation. From our they are part of the system and project and that they are for power generation in the future. For example, we own estimate, it will probably take at least five years important stakeholders in the proposed Electricity Act. were able to enter into an agreement with the World to generate enough power supply of our own. With Bank to have a cross border transmission line between the Upper Tamakoshi project and few other private/ There are political problems especially with the foreign Nepal and India. With this a lot of investors will feel the public sector projects we will be able to eliminate the investors. We need to work in the political sector confidence to invest in Nepal. load shedding completely. Before that, we need to look although there is a common commitment from all the for other alternatives such as import from India. Within political