The government will provide a grant of Rs 10 million per MW for hydropower promoters from the next fiscal year. The Energy Ministry has already sent the proposal to provide grant to the promoters of the Finance Ministry. The budget for the next fiscal year will have the provision for grant.
“I have already sent proposal to the Finance Ministry for discount on value-added tax (VAT). It will be implemented from the upcoming fiscal year,” Energy Minister Radha Kumari Gyawali said. The Energy Ministry, after minister level decision, has already sent the proposal to the Finance Ministry for inclusion after the task force formed under Joint Secretary at the Energy Ministry Keshav Dhwaj Adhikari recommended for grant of Rs 10 million per MW. Though there were talks about bringing the provision about grant in the current fiscal year it could not be implemented. The grant will be adjusted in the VAT the promoters have to pay to the government after implementation of the grant. This will reduce cost of the projects.
The promoters have been demanding VAT discount for a long time now. Construction of a project costs a minimum of Rs 150-180 million depending on the nature of projects. Speaking during the workshop titled ‘Sustainability of Hydropower in Nepal’ organized jointly by the Nepal Hydropower Association and International Hydropower Association, minister Gyawali claimed that she will take initiative to include discount in the budget. She claimed that feasibility study of big reservoir projects like Karnali Chisapani and Naumure will also be started.
Vice Chairman of the national Planning Commission Professor Govinda Raj Pokharel also stated that the upcoming budget will prioritize hydropower. He claimed that he will also take initiative for discount sought by the promoters for hydropower development. The participants also opined that procedural and policy delays have obstructed hydropower development.