Sri Lanka and Nepal to seek hydropower investments
The Morning: Sri Lanka and Nepal look forward to seeking investment opportunities in the hydropower sector.
Accordingly, a virtual meeting was organised between hydropower companies in Sri Lanka and Nepal’s Ministry of Energy, Water Resources, and Irrigation (MOEWRI) as well as the Nepal Electricity Authority (NEA) on the investment opportunities in Nepal for hydropower development. The meeting was jointly organised by the Embassy of Sri Lanka in Nepal and the Export Development Board (EDB) of Sri Lanka and was held on 6 May 2022.
During the meeting, EDB Chairman Suresh de Mel highlighted the importance of the construction sector as an export service for Sri Lanka and the expertise in hydropower available within the Sri Lankan private sector which has made considerable inroads, particularly in the African continent. Nepal, therefore, would be an important regional market for Sri Lankan investors.
Ambassador Himalee Arunatilaka said that the vast water resources in Nepal made it an ideal market for hydropower development projects. Given Sri Lanka’s expertise in the field, particularly in small hydropower projects, prospects for joint collaborations are many. Ambassador Arunatilaka further noted that such collaborations between Sri Lanka and Nepal would be a valuable example of South-South and regional co-operation in achieving energy security.
The Nepali authorities highlighted the advantages of investing in the sector as well as the procedures and guidelines for foreign investors. Nepal has the potential to generate 42,130 megawatts (MW) of hydroelectricity that is technically and economically viable while only a fraction of that (1476 MW) is being generated at present.
NEA Managing Director Kul Man Ghising stated that Nepal encourages investment from neighbouring countries, as it plans to export its excess hydroelectricity to the region in the future. Given the abundance of water bodies and the low cost of production per unit, investing in Nepal’s hydropower sector can be advantageous and provides win-win solutions for the region to shift to green and clean energy.
MOEWRI Joint Secretary Madhu Prasad Bhetuwal made a detailed presentation on the positive investment climate in the sector and the targets set by the Government for power generation by 2028, for both the domestic market and for export.
He also highlighted the regional initiatives within the South Asian Association for Regional Co-operation (SAARC) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Co-operation (BIMSTEC) as providing a conducive environment for regional co-operation in the energy sector.
NEA Director Prabal Adhikari highlighted the prospects for cross-border power trading and also briefed on the current generation capacity and the transmission and storage infrastructure in place. He further highlighted the importance of the private sector in hydropower generation in Nepal and noted that by 2025, Nepal hoped to completely eliminate dependence on imported power.
The Small Hydropower Developers’ Association of Sri Lanka conveyed their keen interest to invest in Nepal’s hydropower sector, particularly given the opportunities for small projects which is a niche expertise area for Sri Lankan companies. The credibility and confidence accrued from international experience and partnerships has enhanced Sri Lankan hydropower developers’ ability to seek overseas funding.
Furthermore, the sector has been further strengthened by its backward integration capacity. LTL Holdings, which is already engaged in Nepal’s hydropower sector, shared their experience of investing in Nepal, providing a valuable input to the discussion.
The meeting was the fourth in a series of webinars organised by the Embassy with the EDB to explore opportunities in the construction services sector. The request for an in-depth and focused discussion on the hydropower sector was made by Sri Lankan companies during the last interaction held on 7 February.
EDB Director Export Services Indumini Kodikara made the closing remarks and thanked all participants, especially from the Nepal Government, for their valuable presence and contribution to the discussion. Close to 30 companies representing the hydropower sector in Sri Lanka, including the Small Hydropower Developers’ Association, attended the webinar.
OSL take:
The ongoing power crisis in Sri Lanka has opened up many business/investment opportunities in the country’s power industry, especially in the renewable energy sector. With the country’s focus shifting more towards renewable energy generation with a target of increasing renewable power to 70% of Sri Lanka’s power mix by 2030, the renewable energy sector poses a host of lucrative business/investment opportunities in the country. Given the growing collaboration on renewable energy sector between Sri Lanka and other countries, foreign businesses/investors could consider the increasing business potential in Sri Lanka’s power industry and explore opportunities.
| Article Code : | VBS/AT/26052022/Z_1 |