NepaliBiz.com: March 2007

Saturday, March 31, 2007

Roundup of Economic & Business News (Mar 24- Mar 31)

WEEKLY SHARE UPDATE: Share trading steps into bear zone

WEEKLY SHARE UPDATE: Share trading steps into bear zone
Himalayan Times, 31-Mar-2007

After staying stable over the last two weeks, the stock market this week entered into bear zone, as share prices of leading scrips inched downward or remained stagnant.

The Nepal Stock Exchange (Nepse) index posted a loss of 7.53 points against last week’s minimal loss of 0.85 point. Nepse, the country’s sole secondary market, stabilised two weeks ago after a heavy loss of over 18 points.

The weekly trading report of Nepse shows that its index dropped to finish off at 480.99 points on Thursday, down from 488.52 points of Sunday, the first day of trading at Nepse floor. The Nepse index remained constant on the second day at 488.52 points, which however, dropped to 480.99 points on the closing day on Thursday.

The weekly turnover stood at Rs 91.62 million with 279,357 unit shares having been traded through 1,357 transactions during the week. A total of 83,131 unit shares worth over Rs 36.78 million were traded through 1,157 transactions. Out of a total of 70 listed companies for share trading, 59 companies saw transactions this week.

The group wise share trading data shows that all the groups listed at Nepse suffered losses this week, pushing the market down to the bear zone. Among the losers, the commercial banks group, which is the largest scrip by volume, suffered a heavy loss of 10.10 points. The group’s index plunged to 501 points from an opening of 511.10 points on Sunday.

Likewise, the others group’s index plummeted by 9.24 points, as it closed down at 651.59 points from the opening 660.83 points. The finance group also suffered heavily and its index finished off at 430.68 points. Earlier the group began its trading at 436.78 points on Sunday.

The manufacturing group lost 2.12 points and closed at 344.95 points on Thursday, from the opening of 347.07 points. Similarly, the insurance and development banks groups also lost in their respective indices. The insurance group closed at 607.45 points, while the development banks group finished off at 477.58 points.

The hotel and trading groups, however, remained constant at 235 points and 148.71 points, respectively. These two groups have not a single trading throughout the week.

Despite the loss, the commercial banks group continued its domination by capturing the largest chunk of total share trading. The group cornered 49.81 per cent of the total trading. The other group came second with 35.90 per cent and the finance group had 6.87 per cent share. The development banks group also had a 4.01 per cent share, while the insurance group bagged 3.09 per cent of the total trading.

Share trading took place for three days only under a regular lot because of public holidays on Monday and Tuesday. Among the listed companies, Nabil Bank, Nepal Investment Bank, Himalayan Bank, Nepal SBI Bank, Nepal Bangladesh Bank, Everest Bank, Machhapuchhre Bank, Lumbini Bank, Kumari Bank, Laxmi Bank, Siddhartha Bank, NCC Bank, Chilime Hydropower Company, National Hydropower Company, Sikhar Insurance, Nepal Merchant Banking and Finance, Standard Finance, Development Credit Bank and Sanima Development Bank saw transactions throughout the week.

Himal Energy acquires more BKPC shares

Himal Energy acquires more BKPC shares
eKantipur.com, 28-Mar-07

Himal International Energy Private Limited (HIEPL) has acquired another 10 percent shares in Bhote Koshi Power Company (BKPC) from International Finance Corporation (IFC).

Following the deal sealed on Wednesday, HIEPL, along with its sister concern - Himal International Power Corp, now owns 95 percent equity in BKPC, states a press statement issued today.

The remaining five percent shares are owned by Montgomery Watson Harza, an American engineering company.

The shares were purchased as per the agreement reached between IFC and HIEPL in March last year, states the release.

Bhote Koshi Power Project, a 36-megawatt run-of-the-river hydropower project situated in Sindhupalchowk district, was commissioned in January 2001 with a total investment of US$ 98 million.

BKPC, which is managed by Tara Management Private Limited, is selling power to Nepal Electricity Authority (NEA), under a power purchase agreement.

Sunday, March 25, 2007

Roundup of Economic & Business News (Mar 1- Mar 23)

Roundup of Economic & Business News (Feb 17 - Feb 28)

Saturday, March 24, 2007

Aarti Strips to close down

Aarti Strips to close down
eKantipur.com, 13-Mar-2007
BY BINOD BHANDARI

Fed up with heavy loses and cancellations of orders due to regular strikes and bandas, Aarti Strips Pvt Ltd, the largest manufacturer of galvanized corrugated sheets in Nepal, has announced that it will be closing its plant in Nepal.

According to General Manager Roshit Unnithan of Aarti Strips, the company would soon be informing the Department of Industry about the decision and then move the plant to Indian cities of Guwahati or Kolkata. The company, which was established five years ago in Morang's Tankisinwari with an investment of Rs 2.8 billion from India's Bhusan Steel & Strips Limited, employs 288 Nepalis and Indians.

Unnithan told the Post that the recent series of events has caused cancellation of three months of orders worth millions. “There is always some kind of banda or strike going on. And, on top of that there is also a soaring power problem. We can't bear the loss any more and feel that our investment here is not secure anymore,” he said. Unnithan has put the figure of losses due to three months of strikes at more than Rs 60 million.

With an annual output of Rs 6 billion worth of sheets, Aarti Strips earned a profit of more than Rs 600 million in the last five years. The company, which exports 90 percent of its production, contributes Rs 250 million as revenue to the government annually. According to Unnithan, the plant consumes Rs 15 million worth of electricity and diesel monthly.

But the trouble for Nepal's economy does not stop here. There are indications that the problems cited by Aarti Strips could spark a mass exodus of other industries as well. A source told the Post that other industrialists in Biratnagar are also preparing to follow suit and move their investments to India. The source also revealed that more than half a dozen industrialists from here have already started investing in India. Other reasons cited by them include labor strikes and being forced to make donations and financial contributions.

Nepal set to sign labor pact with S Korea

Nepal set to sign labor pact with S Korea
eKantipur.com, 12-Mar-2007
BY RUPAK D SHARMA

Nepal is all set to ink the much-touted labor agreement with South Korea, which would pave the way for thousands of Nepalis to legally enter one of Asia's industrial hubs for employment every year.

Talking to the Post, Minister of State for Labor Ramesh Lekhak said that the South Korean Embassy in Kathmandu today formally handed over the draft of the memorandum of understanding (MoU) to the Government of Nepal.

“A steering committee formed under the Labor Secretary will now look into the draft, make necessary comments and forward it to South Korea, within a week,” he said.

The state minister expressed hope to receive a formal invitation from the South Korean government to sign the final MoU soon after the committee submits its recommendations.

Signing of the agreement will mean entry of Nepal in the Employment Permit System (EPS) of South Korea, a system through which the country is importing workers from foreign countries.

Nepal's enlistment into the EPS, on one hand, will grant the country the status of official labor source country of South Korea, while on the other, entitles Nepalis accepting employment there, better wages. The better wage means earnings of around Rs 150,000 per month, according to the officials.

“Upon signing of the MoU, the South Korean government will formally inform about labor quotas allotted for Nepal. If things move according to plan, the South Korean government will make the announcement by the end of March,” the state minister said.

South Korea is expected to distribute around 49,000 workers quota among countries enlisted in the EPS this year. Currently, nine countries, excluding Nepal, are enrolled in the EPS. According to the state minister, the government would handle the labor quota the country would receive.

General understanding reached so far for employment in Korea says that the candidates applying for Korean employment must be aged between 18-40 years.

“They must pass the Korean language test conducted by South Korean authority, get through medical test, should not have criminal records and should not be a deportee,” he said.

If an applicants meets the criteria set by the Korean authority, Nepal government will forward the names to South Korea. “The South Korean government will then make the final selection and send names of candidates who can go to Korea for employment purpose.

Currently, Nepalis are entering South Korea under the trainee workers quota. Official statistics show that around 5,000 Nepalis are currently employed in South Korea.

India proposes building SAARC power ring

India proposes building SAARC power ring
eKantipur.com, 5-Mar-07
BY GOPAL KHANAL

Participants at the SAARC Power Meet that began in New Delhi on Monday have started discussions on building a SAARC power ring to cooperate for exchange of electricity, gas and oil to address energy needs of SAARC member countries, as proposed by India.

India's central Electricity Minister Sushil Kumar Shinde made the proposal in the meet that is being organized by India's Foreign Ministry and Electricity Ministry. The minister urged representatives from SAARC member countries to engage in homework for building such a ring.

If built, the Power Ring would allow SAARC member countries to cooperate in channeling energy

to countries facing crisis while allowing countries with excess energy to sell energy.

The minister also proposed building electricity grid connections among member countries. Currently, such connections exist only between Nepal and India, and India and Bhutan.

The existing grid connection between Nepal and India, however, is inadequate for bulk exchange of power.

The meet, which is taking place before the SAARC summit, has participation of government officials, and representatives of NGOs, business houses and experts from all SAARC member countries.

India's Ministry of Electricity has stated that the meet will also focus on promoting sources of energy, expansion of gas pipelines and joint-venture development of hydropower projects.

The participants will continue discussions on Tuesday, while on Wednesday line minister of all SAARC countries will be meeting.

The SAARC Power Meet started after Indian

Prime Minister Manmohan Singh proposed, during the 13th SAARC summit in Dhaka, Bangladesh, to have a South Asian energy dialogue.

The Nepali delegation includes Joint-Secretary of the Ministry of Water Resources Anup Kumar Upadhyay and Under-Secretary of Ministry of Foreign Affairs Dipak Dhital.

‘Special state provisions a must to address power crisis’ - Karki

‘Special state provisions a must to address power crisis’
eKantipur.com, 4-Mar-07

Arjun Kumar Karki, 44, was appointed Managing Director of Nepal Electricity Authority (NEA) in July 2006. Karki's appointment came at a time when the state electricity utility was recording its biggest operational losses ever and the nation's electricity demand was on the verge of overtaking its total installed capacity. Heir to an unenviable legacy of a utility that generates annual revenue of Rs 12 billion and yet faces a net loss of nearly Rs 2.5 billion, Karki has, in his seven months as NEA chief, seen six projects planned for selling power in the domestic market, reach close to financial closure. A proponent equally of demand management and speedy construction of new projects, Karki stresses that considering the severity of power crisis the nation is facing, some projects should be allowed to enter construction immediately without requiring them to go through the lengthy pre-construction formalities. Post's Puran P Bista and Bikash Sangraula caught up with Karki at his office to inquire on how he plans to steer the country out of a power crisis that threatens to stay for years and erode prospects of an economic growth that the country desperately needs after a decade of insurgency.

Excerpts:

For how long will the country have to face load-shedding?

If we are able to successfully execute the work plan we have, then load-shedding hours will start going down from the dry season of 2008 and disappear from 2010. In order to make our work plan successful, we need the help of all stakeholders.

What is your work plan?

First, demand management and reduction of avoidable losses in the system. Second, we are working to import additional 50 megawatts from India next dry season to ensure that we don't face load-shedding worse than what we have been facing this dry season. Third, we are working to have two high-voltage Nepal-India transmission links ready by the dry season of 2008, after which we can import bulk power from India to reduce load-shedding in Nepal. Fourth, NEA is starting construction of six projects with a target to complete some of them in 2010, others in 2011, and rest in 2012. The projects are the 309 megawatt Upper Tamakoshi, 61 megawatt Upper Trishuli A, 40 megawatt Upper Trishuli B, 30 megawatt Chameliagadh, 27 megawatt Raghughat, and 14 megawatt Kulekhani III. With some of these projects starting generation in 2010 and 2011, we will be in a position to have round-the-clock power supply even by discontinuing power import from India, in 2011.

Observers say that the high-voltage Nepal-India transmission links are meant more for power export to India in the future from Arun III, Upper Karnali and Budhi Gandaki projects that are soon being awarded to private producers, than for allowing Nepal to import power from India to address the chronic power shortage here. How right are they?

Let's be clear on this. Our ultimate objective behind building the high-voltage transmission links is to export power to India. But in the short run, the transmission links will allow us to purchase power from India. At the moment, we are facing a more serious power crisis than they are. Fortunately, power is commercially available in the Indian market. For the next four years, we must utilize this option, after which we will have new projects ready to supply power to the national grid, and others for export to India. It is owing to this long-term objective that we are planning to build 400 kilovolt links rather than 220 kilovolt links. For immediate use, we can charge the transmission link to only 220 kilovolt, and later to higher kilovolts as demanded.

About the six projects that NEA is looking ahead to build, you have been saying that most of them already have funding commitments. So, what is stopping NEA from immediately going ahead with them? We can't afford delays, can we?

Let me make something clear. If we follow all the existing provisions, the transmission links will not be in place by 2008. Similarly, if we follow all existing requirements, construction of Upper Trishuli A, Upper Trishuli B and Raghughat may not commence or be completed according to our schedule. Unlike the other three projects NEA plans to build, the environmental impact assessments of the projects, I just mentioned, have not been conducted so far.

The country is facing a serious power crisis. If our work plan does not move ahead according to schedule, the crisis will deepen. Therefore, the government should allow us to build these three projects and simultaneously conduct environmental impact assessment, rather than the former following the latter. We are proposing to the government, through the Ministry of Water Resources, to allow us do this. The country faces a special situation with regard to power availability. Therefore, we require special provisions to deal with this.

It is being said that Upper Tamakoshi will most likely be the sacrificial lamb of our unique kind of nationalism. Is it not better to build the project quickly with foreign money than build it years later with internal funds? After all, delay means extra cost.

I think we have not been able to clearly explain our position on Upper Tamakoshi. There is no conflict on whose money funds the project. We are only saying that NEA should own the project. Upper Tamakoshi is such a beautiful project that it can do wonders to NEA's financial health. It is true that we are trying to mobilize internal funds to build the project. But this is not because we are against foreign funds. The reason, rather, is that if we ask for loan from foreign financial institutions, they will seek sovereign guarantee, which the government cannot give going by existing provisions. However, the financial institutions in the country understand the gravity of power crisis and will take the offer for financing the project more seriously. NEA has a property of 80 billion rupees and its annual cash flow is about four billion rupees. The country's financial institutions know this and are more likely to invest. That is why we are after mobilizing internal funds. But we are not dead against foreign funds.

We have been talking to Employees' Provident Fund (EPF) for funding Upper Tamakoshi. There have been positive developments. In two weeks, we should be able to reach an agreement with them. We are ready to provide shares to EPF's depositors and also to residents of Dolakha district where the project will be built. Having shareholders from Dolakha will ensure that Upper Tamakoshi does not face local problems that Melamchi or Middle Marsyangdi has faced.

If we are not able to reach an agreement with EPF in two weeks, we will seek foreign funding. We want to begin construction of the project by 2008 end, by which time the under-construction access road will be ready. We plan to complete the project by 2011 end or early 2012.

What about demand side management? You told this daily some time back that NEA is starting a campaign to make consumers switch from incandescent bulbs to compact fluorescent lamps that use 80 percent less energy for the same illumination. Whither the campaign?

We are talking to business houses. Compact fluorescent lamps are costly. Consumers may not be willing to switch to them due to the cost factor. So we are trying to work out a mechanism which will allow NEA pay the supplier, in monthly installments, from savings of monthly bills paid by the consumers. We have asked the Ministry of Water Resources to request the Ministry of Finance to waive off the 15 percent customs on these lamps, so that they become less costly. However, demand side management will only alleviate the power crisis and not solve it. Eventually, we must inject power into our system. There is no alternative to building new projects.

What is NEA doing to bring down its losses of 24 percent?

Losses are happening in three ways. First is theft by our consumers. Second is unauthorized hooking, and third is discontinuation of meter reading and tariff collection during the conflict. We are working to address with all these factors. Currently, Terai unrest has hampered our efforts.

What is the progress in awarding projects to foreign companies for power export? You are a member of the taskforce formed by the Ministry of Water Resources for this purpose.

The taskforce has already submitted its evaluation criteria, including royalties to Nepal and financial as well as technical capabilities of parties interested to build Arun III, Upper Karnali and Budhi Gandaki. We have received relevant documents from interested parties for facilitating evaluation. The taskforce should be able to submit its recommendations to the government in two weeks.

Is there a possibility that these projects might be ready before the projects NEA is trying to build are ready, and Nepal would be exporting power to India while facing heavy load-shedding?

What we need to understand is that the royalties - about 20 percent - that the parties interested to build the export-oriented projects are offering to Nepal, will not come in the form of cash, but as power. So the quick completion of these projects will also help alleviate the power crisis in Nepal.

What about unbundling NEA? There was a lot of talk on this last year.

It is essential. But consider that NEA is unbundled right away. Distribution is where NEA incurs most of its losses. Will the distribution entity survive on its own as things stand? Therefore, first we need to revamp this utility, and then go for unbundling.

Revival of International Interest in Nepal's Hydro Potential

Revival of International Interest in Nepal's Hydro Potential
ekantipur.com, 19-Feb-07
BIKASH SANGRAULA
vikaspost@gmail.com

It's been decades since economic pundits have been saying that if Nepal has a prosperous future, it lies in its rivers.

For a few years post-1990, the country seemed to heed these pundits and sought ways to utilize its rivers for electricity generation. Two approaches were employed. One was through donor-cum-government funding. Unfortunately, this approach saw the country construct very expensive projects owing to strings attached to donor money.

The second approach was private sector investment. With its typical efficiency and commercial acumen, the private sector produced cheap electricity. However, the country lost here as well owing to suicidal power purchase agreements that ensured hefty profits to private producers at the expense of the country's monopoly distributor, Nepal Electricity Authority (NEA), and consumers. Owing to these "take-or-pay" agreements and hefty annual increment in the price of power sold by these producers, NEA will be buying power at twice its selling price in a few years time.

Things suddenly went quiet in the power sector with the armed insurgency ravaging the countryside. After half-a-decade of lull, political changes in April 2006 saw a revival of international interest in Nepal's hydropower potential. This time, the interest is intense and a sense of urgency is palpable both within the government of Nepal and prospective investors.

This sense of urgency has concrete reasons.

Expanding power market in the region

With energy demand forecasts for two of the world's economic powerhouses - India and China - skyrocketing, the market for power in the region has grown geometrically in recent years. Especially for India, which ranks sixth in the world in total energy consumption, the hunger for power is huge as it seeks to overtake China in the economic marathon.

For investors, India has emerged as an ideal market for electricity that can be generated from Nepal's rivers, owing to proximity of Indian cities to the Nepali border. The Electricity Act of India 2003 that opened the Indian power market to all has made the prospect even more attractive. The extent of energy hunger in India saw it sign civil nuclear cooperation agreement with the United States in 2006 and a memorandum of understanding with Russia to build four nuclear reactors in January 2007. But that doesn't end Nepal's relevance in the regional power market. Unlike hydropower, nuclear reactors have a short life span, are non-renewable and can cause serious environmental hazards.

It was in this backdrop that Kathmandu witnessed a flurry of power summits after the country entered a peace process in mid-2006. Big business houses from India and the United States, including General Electric, Alcoa Inc, Reliance Energy Ltd, Tata Power Company Ltd, Jaypee and GMR were represented in these summits.

14,000-megawatts up for grabs

During the USAID-sponsored summit held in early November 2006 in Kathmandu, the Department of Electricity Development (DoED), Nepal's power sector regulator, officially sought foreign investment in projects with total generation capacity of 14,000 megawatts for power export to India. To encourage foreign investment in hydropower, Finance Minister Dr Ram Sharan Mahat pledged that foreign companies would be allowed 100 percent ownership of hydro projects; a meager 1 percent customs would be levied on import of plant, equipment and construction material; and provisions for investment protection would be ensured.

Among projects on offer is the 10,800-megawatt Karnali (Chisapani), dubbed by hydropower hawks as the "jewel of Nepal". If built, this will be the second largest hydropower project in Asia after China's 18,200-megawatt Three Gorges and one of the biggest in the world. An American company, Texas Power and a group of Non-Resident Nepalese backed by Russian financiers, are already vying for the generation survey license for this "jewel".

So far, several dozen companies have filed formal letters of interest at DoED, and a team formed by the Ministry of Water Resources is reviewing them, seeking financial details from the interested companies, and evaluating the proposals. In mid-2007, the team will recommend the cabinet to award the projects to companies evaluated best in terms of financial capability and technical expertise.

Whither water sharing disputes?

With the readiness to offer almost any hydropower project to private investors, it appears as though the government is in a hurry to make up for not having any sizeable project enter construction in the past six years. While this sense of urgency is not entirely uncalled for, our decision-makers seem to be overlooking long-standing disputes on water sharing and downstream benefits. In 1998, the then US Energy Giant Enron gave up efforts for acquiring license for Karnali (Chisapani) after a public outcry made the then line minister to ask the company to wait till Nepal and India resolve the issue of downstream benefits. While this later proved a blessing for Nepal with Enron going bankrupt, it is worth pondering whether the project would have progressed if the company in question were General Electric instead of Enron.

Have the issues of downstream benefits like regulated water supply for irrigation to India, and upstream losses like inundation of land in Nepal, owing to building of dams for large-scale projects, been resolved yet? In the absence of resolution of these issues, a major project, the 6,480-megawatt Pancheswar, has not moved ahead for over a decade after the Mahakali treaty was ratified by two-thirds majority of the parliament in 1996.

Since any project involving downstream benefits is sure to stir public outcry, the safest course would be to award run-of-river projects, which don't generate disputes, as there is no water sharing involved, to private producers to begin with. With royalties generated from these projects, the government should show people how Nepal can gain economically through selling power. The prospect of economic prosperity should thereafter make it easy for decision-makers to move on to allowing the private sector build storage projects as well.

Burgeoning energy crisis at home

Whether and when Nepal will become prosperous by exporting power to India is a million, well, billion-dollar question. But there is no doubt that the country's effort to stand on its own feet after being on crutches for ten years of bloodshed will not succeed if the country faces power cuts of eight hours per day from mid-March 2007 and 12 hours per day in April 2008. Sadly, these are not imaginary figures. These are the load-shedding forecasts of NEA.

Such extended power cuts are happening in a nation which is one of the richest in hydropower potential in the world and where, so far, only 1.7 percent of energy demand is being met by electricity. From now on, Nepal will not be facing power cuts in winter only. There will be planned or contingency power cuts round the year, even in the monsoon, for at least another six years.

India has committed to built a project of around 200-megwatt size, most likely the Naumure project, for Nepal's internal consumption. Efforts are underway to build the 61-megawatt Upper Trishuli with Chinese concessional loan, also for Nepal's internal consumption. And NEA is determined to build the 309-megawatt Upper Tamakoshi with internal funds, also for internal consumption.

Even if these projects enter construction right away, they will take at least half a decade to be ready for generation. In the meantime, the 70-megawatt Middle Marsyangdi, which NEA hopes will be ready for operation in early 2008, will not help. Nepal is destined to face progressively worse power cuts, at least till 2012/13. The price the country's economy will have to pay for this is best left to the imagination.

Nationalism and Upper Tamakoshi

During the USAID-sponsored summit in November last year, NEA's managing director offered everything to the private sector, but said that Upper Tamakoshi will in no eventuality be offered to them. For some strange reason, instead of highlighting the attractive features of the projects on offer, he highlighted the features of the project not on offer - Upper Tamakoshi - and said that it is the best project identified in the country. "Build the rest, but we will build Upper Tamakoshi on our own," he said, prompting one representative from an Indian company to shoot, "What you are saying is you are keeping the best for yourself and offering us projects that are second-rate. Are you alluring us to Nepal's hydropower projects or asking us to go away?"

Many die-hard nationalists have written newspaper articles in recent months arguing that Nepal must build Upper Tamakoshi on its own as it is the cheapest project and it will save the sinking ship called NEA and even the nation. Some have even gone to the extent of proposing that deposits in all public financial institutions in the country should be invested on this project if need be.

So far, not a single financial institution has shown interest in investing in a project that will be built by an electric utility that is bearing a loss of Rs 2.5 billion a year. The financial institutions have shown wisdom.

If we keep on shelving Upper Tamakoshi like this, it might face the fate of a beautiful girl whose father rejects all prospective grooms thinking them undeserving of her only to realize later that the daughter has aged and is no longer attractive.

Since Upper Tamakoshi is so attractive, why can't Nepal offer it to private parties after bargaining smartly on the royalties? Nepal can bargain for, say, 40 percent royalties from the project and ask for bank guarantee that the prospective producer would have to forfeit if the project is not completed in time. Or, the government can fix a date after which Nepal gets the said royalties whether the project is completed or not. That would ensure that unlike Australia's Snowy Mountain Engineering Corporation that has been holding the license for the 750-megawatt West Seti for over a decade now and has still not laid even the foundation stone, new parties would expedite project construction as there will be cost involved in delays.

Infrastructure and power exchange

NEA recently signed a Memorandum of Understanding with Infrastructure Leasing & Financial Services Limited (IL&FS), one of India's leading infrastructure and development finance companies, to build four high voltage transmission corridors across the Nepal-India border as a Nepal-India joint venture. Both the countries will own shares in the transmission links on both sides of the border. Construction of two of the transmission links will take two years, according to NEA chief Arjun Kumar Karki. This will make possible bulk exchange of electricity between the two neighbors, or, to put it in a better perspective, to get supplementary power from India during winter and export hundreds of megawatts to India from privately built projects.

The electricity highway might be in place in a few years, but will there be any traffic on the highway?

Major projects on offer
Karnali (Chisapani) 10,800 MW
Kaligandaki II 660 MW
Budhi Gandaki 600 MW
Arun III 402 MW
Upper Arun 335 MW
Lower Arun 308 MW
Dudh Koshi 300 MW
Upper Karnali 300 MW

Domestic demand forecast for next decade
2008 - 695 megawatts
2009 - 760 megawatts
2010 - 820 megawatts
2011 - 891 megawatts
2012 - 971 megawatts
2013 - 1057 megawatts
2014 - 1148 megawatts
2015 - 1246 megawatts
2016 - 1336 megawatts
2017 - 1445 megawatts

(Source: NEA Annual Review, August 2006)

Project's proposed for internal consumption
309-megawatt Upper Tamakoshi (NEA through mobilizing internal funds)
207-megawatt Naumure (Indian grant)
61-megawatt Upper Trishuli 61 (Chinese loan)
30-megawatt Chameliagadh (Govt. of Nepal-NEA)
27-megawatt Raughat
14-megawatt Kulekhani III

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