Great disconnect in tackling energy crisis   NEA must function as a business entity and government must walk the talk   Abhilasha Rayamajhi Kathamandu  I t is an irony that despite being endowed with tremendous hydropower potential, Nepal is facing an acute energy crisis. At present, daily 13 hours of power cut is the sad reality of the nation. The government claims it will prioritise the energy sector and promises to end load shedding within a year by declaring an energy emergency and executing policies by fast track. However, stakeholders do not believe that the government is serious or actually intends to walk the talk. The failure of the energy emergency declared in 2008 and the inefficiency of the government has led the public to lose trust in such commitments. Sujit Acharya, Chairperson of Energy Development Council ( EDC) claims, “ It seems the most inefficient and uneducated people are in the Nepal government and top levels of management in Nepal Electricity Authority ( NEA).” According to him, “ the development of the hydropower sector has been disrupted mainly due to the bureaucracy and government officials themselves working for their selfish motives rather than national interest.” PPA problems Acharya presented the three key obstacles to development of the hydropower sector. He pointed out that the government of Nepal plans to announce the signing of Power Purchase Agreement ( PPA) in US Dollars for foreign investors in the upcoming Energy Crisis Mitigation Plan but refuses to sign cheaper PPA for Nepali developers. “ Signing dispatchable PPA means that NEA will purchase electricity only at the time of need. Banks and financial institutions will never finance hydropower projects with such PPA because it is risky to invest in projects that do not guarantee revenue,” he said. Therefore, hydropower projects developed by the Nepali private sector have been blocked, according to him. Bureaucratic hurdles Secondly, he stressed that the bureaucracy and red tape in the Ministry of Forest and Soil Conservation was a problem. “ The Ministry requires hydropower developers to pay a fee for its contribution to conserve trees,” he stated during his presentation. While around 78 per cent of the population in Nepal still depends on firewood for fulfilling their energy needs, he said, “ The ministry requires Nepali developers who rent land for 30 years to pay a rental fee and also provide an equivalent amount of land that it has rented.” In order to rent this land and cut down trees a cabinet decision is required which takes approximately two years at the least. He claimed that the department of forest further intentionally delays project development by not even looking at the land or presenting problems for the land selected by the developer. Complacent and confusing Thirdly, he highlighted obstacles created by the Ministry of Land Reform and Management. He said, “ The ministry applies the land ceiling rule of 75 ropanis to hydropower projects in the same manner as to individual traders. Then it takes another one to two years to get further approvals.” The land acquisition, land ceiling for generation, transmission and distribution of licenses is also a lengthy and uncertain process. The problem is that there is lack of collaboration between the Ministry of Energy, Ministry of Land Reform and Management and the Ministry of Forest and Soil Conservation, which has led confusion and lack of efficiency in development of the hydropower sector. In such a confusing situation Acharya questioned the seriousness of the Prime Minister, who recently stated that load shedding will end in a year, wondering if those in government understood the complexities of these problems and how the government itself is the biggest obstacle. Inefficiency of NEA As per energy experts, NEA has suffered from huge losses and its inefficiency is also one of the main causes for the energy crisis. They recommend that political interference by the government be eliminated for NEA to recover its losses and perform as a business entity. The energy sector is also mismanaged because the need for unbundling production, transmission and distribution functions are yet to be addressed. Khadga Bahadur Bisht, President of Independent Power Producer’s Association Nepal ( IPPAN) said, “ We have recommended 16 points to the government which includes incentives to private sector, development of single desk approval and one- window policies.” He said that if the government is serious about solving the energy crisis it must address these most important issues immediately. Only then can a reduction in the long hours of load shedding be controlled in the country. According to Nakarmi, “ In the short term it is advisable to import from India, however in the long run we must develop hydro power projects in Nepal. NEA and the government must be separated, NEA must function as a business entity and the government should only set policies and facilitate.”