At present, Nepal is generating 2,000MW of energy, but in the next three years this figure will soar to 4,500MW, not taking into account power generation from smaller plants. Peak demand is at 1,500MW which is increasing by 20% every year. Even then, Nepal will have excess of 4,700MW by 2025, which it risks wasting unless there are new transmission lines – with or without the MCC.
Most of the $500 million MCC grant is earmarked for the Kathmandu-Hetauda-Butwal 400kVA transmission line to distribute electricity from existing and new hydropower plants in central and eastern Nepal, and also connect to a high-capacity line to Gorakhpur so Nepal can sell surplus monsoon electricity to India.
Says hydropower investor Gyanendra Lal Pradhan: “If the Kathmandu-Hetauda-Butwal transmission line is not built under the MCC, investors will have folded, and even banks that have backed the projects will be in deep waters. It will be tragic for a country with such immense hydropower potential.”
It has been four years since a coalition government consisting of the Nepali Congress and Maoists signed the MCC contract in Washington, which is awaiting ratification by Nepal’s Parliament. In her last visit, the MCC’s Fatema Sumar said the US was not prepared to wait indefinitely for Nepal to gets its act together.