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Economy
Energy, Forestry and Environment
Energy
Energy consumption in the FY 2000/2001has increased by 2.4 percent to 7912 Tons of Oil Equivalents (TOE) as compared to
previous year and expected to increase by 3.2 percent to 8162 TOE in the FY 2001/2002.
When we divide source of energy in to two parts - traditional and commercial- of the total energy consumption in the
FY 2000/2001, traditional energy occupies 86.2 percent while the portion of commercial energy was 13.8 percent. In the
FY 2001/2002, consumption of traditional energy is expected to remain at 85.3 percent while the portion of commercial
energy will remain at 14.7 percent, which shows Nepalese economy still heavily relying on traditional source of energy.
Of the total traditional energy consumption in the FY 2000/2001, share of fuel wood was 76.6 percent, agriculture and
cattle residue was 3.8 percent and 5.8 percent respectively, while in the FY 2001/2002 it is expected that the consumption
of fuel wood will remain at 75.9 percent while that of agriculture and animal residue will be 3.7 percent and 5.7 percent
respectively. Similarly, of the total commercial energy consumption in the FY 2000/2001, the share of Petroleum was 9.3
percent, Coal 3.1 percent and electricity 1.4 percent, while in the FY 2001/2002 the share of Petroleum is expected to
remain at 9.7 percent, Coal 3.6 percent, and electricity 1.4 percent.
Of the total energy consumption in the FY 1999/2000, share of residential sector was 89.3 percent, industrial sector 4.6
percent, commercial sector 1.1 percent, transportation sector 3.9 percent and agriculture sector 0.9 percent. In the FY
2000/2001, share of residential sector was 88.9 percent, industrial sector 4.8 percent, commercial sector 1.2 percent,
transportation sector 4 percent and agriculture sector 0.9 percent. Of the total energy consumption in the FY 2000/2001,
substantial portion was in residential sector in which traditional energy (fuel wood) occupies 76 percent and that of
petroleum 3.2 percent. Of the total energy consumption in the FY 2000/2001, share of traditional alternative energy was
0.36 percent.
Electricity
The country has a total hydropower potentiality of 83 thousand megawatt, of which 373.2 megawatt has been exploited by the
end of the FY 2000/2001. If we include, 183 kilowatt production of Sage Khola small hydropower plant completed by a private
sector during the current fiscal year, total production goes up to 373.6 megawatt (0.5 percent of total capacity). Of the
total hydropower production, 368.3 megawatt has been in the national grid and the rest 5.3 - megawatt has been produced by
small hydro power plants and distributed locally. Similarly, share of thermal power production is 56.8 megawatt and that of
solar power is 100 kilowatt. As of now, all 75 districts have been connected by power.
Hydropower Development Policy 2001
Objectives:
- Utilization of water resource potentiality of the country by producing electricity in low cost.
- Supply of qualitative and reliable electricity within the country in a reasonable price.
- Linking of electrification with economic activities.
- Expansion of rural electrification projects for the economic development of rural sector, and
- Development of hydro electricity as export commodity
Main Policies:
- Encouragement provided to operate hydroelectricity on the basis of BOOT (Build-Operate-Own-Transfer) principle
- Implementation of multipurpose big storage project to gain maximum achievement out of down stream benefit
- Introduction of procedure which is transparent and incentive oriented in order to attract local and foreign
investors
- Capital market in the country will be encouraged to invest in hydroelectricity
- Encouragement will be provided to export electricity on the basis of bilateral and multilateral assistance
- Government entities will be restructured to encourage community/cooperative, local and private sector in the
expansion and distribution of electricity on competitive basis
In connection with the expansion of hydropower in the country, the production from all three units of Kali Gandaki
Hydropower Plant (144 megawatt) have stated their production- the greatest hydropower plant of Nepal so far - financed
jointly by His Majesty's Government of Nepal, Nepal Electricity Authority and loan assistance of Asian Development and the
government of Japan. While the construction of Indrawati III Hydropower Plant, financed by private sector, is in the final
stage. By the completion of these two power plants at the end of this fiscal year, an additional 151.5 megawatt will be
added in the total hydropower production and will reach to 524.9 megawatt (0.6 percent of total capacity). The
constructions of Chilime Khola of Rasuwa (20 megawatt) and Piluuwa Khola of Sankhusashava (3 megawatt) financed by private
sectors will be completed by the next fiscal year. The production from Middle Marshyangdi Hydropower Plant, Lamjung
(70 megawatt) has started from this fiscal year. The operation of small solar power plants - Heldung (500 kilowatt),
Gamgad (400 kilowatt) in Humla and Mugu districts have started from the last fiscal year.
The electricity purchase agreements of Phemekhola, Panchther (995 kilowatt) and Khudikhola, Lamjung (3450 kilowatt) were
concluded by the end of the last fiscal year, while Nepal Electricity Authority has concluded such agreements for
Melungkhola, Rasuwa (5 megawatt), Langtangkhola, Rasuwa (10 megawatt) and Sunkoshi Sano, Sindhupalchowk (2.6 megawatt)
during this fiscal year.
In line with the expansion of the electrification, different level voltage lines are operating, these include single
circuit 1040 km, double circuit 367 km under high voltage 132 kV, single circuit 205 km, double circuit 161 km, four
circuit 2.5 km and 1536 km of 22 km and 33 kV levels under the joint 66 kV and 132 kV lines. In the current FY, the
construction of Kaligandaki 'A' Butwal (44 km) and Hetauda-Dhalkewar and Butwal-Bardhaghat second circuit (174km) under the
132 kV and Basantpur-Terathum (15 km) under 33 kV are completed. The construction of Kaligandaki 'A' Pokhara (66-km) under
the 132 kV is in the final stage. Currently, Ilam-Phidim-Taplejung (100 km), Sitalpati-Mukhikot (50 km), Buipa- Okhaldhunga
(33 km) and Chinchu-Jajarkot (70 km) of 33 kV level are under construction. As there has been understanding with India to
exchange electricity of 150 megawatt as against the arrangement of 50 megawatt, there has been agreement in principle to
construct transmission line for the exchange of additional electricity in 3 more points of Nepal - India border. In this
direction, necessary study and preparation have been carried out to construct transmission line- Butwal-Sunauli (25 km),
Parwanipur-Birgunj (25 km), Dhalkewar-Birttamod (45km) - of 132 kV capacities. Necessary study and preparation have been
initiated to construct 132 kV capacity Kathmandu-Ringmon transmission lines to strengthen the capacity 'of transmission in
Kathmandu Valley due to increasing urbanization.
Load Dispatch Project has been in operation with the objectives of connecting main substation and powerhouses of kingdom to
Load Dispatch Center with communication system and SCADA system.
In the power distribution side, electrification will be continued in all districts connected by power financed through
HMG/N and NEA. While there has been loan agreement with Asian Development Bank for the electrification in additional places
in 35 districts of the kingdom, the negotiation is underway with the World Bank for the electrification of additional
places of Bhaktapur, Lalitpur, Nuwakot, Dhading and Kavrepalanchowk districts. Necessary works for seeking assistance are
being under taken for the electrification in the districts of Mid Western and Far Western regions.
In order to expand hydropower services, detailed feasibility study is continuing. The detailed study and infrastructure
development has been carried out for Kulekhani 111 and Chameliyagad projects. In connection with carrying out study of dam
projects, 102 projects were identified, four attractive projects such as Upper Seti (Tanahu), Madi Isaneswor
(Kaski, Lamjung), Langtang (Rasuwa) and Madi/Begnas (Kaski) have been selected for study and feasibility of two projects
have been continued. Updating of feasibility study of Kankai Multipurpose Project is undertaken while with view to develop
hydropower with joint investment of NEA and private sector, studies have undertaken to projects such as Upper Karnali,
Khimti-2, Thulo Dhunga, Upper Tamakoshi and Upper Modi 'A'. In this FY, the studies are in different stages for the
projects below 5 megawatt as identified in Master Plan Study of Small Hydropower.
In the FY 2000/2001, the total supply of power, including hydropower, thermal power and imported from India, was 1868.4
GWH, in the current FY; this has increased by 27 percent to 2372.9 GWH. Of the total power, in the FY 2000/2001, the share
of internal consumption was 1281.1 GWH and 126 GWH was exported to India and there was a deficit of 461.3 GWH. In the
current FY, the share of international consumption will be 1472.5 GWH and export to India will 170 GWH and 730.4 GWH will
remain as deficit.
Sector wide consumption of power in the FY 2000/2001 reveals that industry sector accounted for 37 percent, household
sector 36.8 percent, commercial sector 6.7 percent; export 9 percent and miscellaneous 10.5 percent. In the FY 2001/2001,
it is expected that consumption by industrial sector will account for 36.8 percent, household sector 36.5 percent,
commercial sector 6.3 percent, export 10.4 percent and miscellaneous sector 10 percent.
The number of electricity consumer in the FY 2000/2001 was 765,000, by the end of FY 2001/2002 the number of electricity
consumer will increase to 885,000. Similarly, in the FY 2000/2001 only 18 percent of total population used electricity,
which is expected to reach 20 percent by the current FY.
Petroleum Products
In the FY 2000/2001, the consumption of petroleum products have increased by 1.7 percent to 829,467 kilo liter, the cost of
which is Rs.18685.7 million. The consumption of petroleum in the first eight months of the FY 2000/2001 was 533, 579 kilo
liter this has increased by 4.1 percent in the first eight months of the current FY, the cost of which is Rs.11635.6
million. The import of petroleum product in the FY 2000/2001is 33.6 percent of commodity exports. In the FY 2001/2002, it
is expected to remain at 44.1 percent.
Diesel, Kerosene, Petrol and aviation fuels are among the widely used petroleum products. In the FY 2000/2001, the/share of
Diesel was 40.2 percent, Petrol 7.3 percent, Kerosene 39.2 percent, Civil aviation 7.9 percent and L.P Gas 4.8 percent.
During the first eight months of the current FY, the consumption of Diesel was for 33.2 percent, Petrol 7.4 percent,
Kerosene 45.5 percent, Aviation fuel 5.7 percent and L. P. Gas 5.5 percent.
Coal
Of the total commercial energy consumption in the FY 2000/2001, share of coal was 22.6 percent or 46,000 tons of TOE, which
has increased by 20.7% to 2, 97, 000 tons of TOE in the current FY. In the FY 2000/2001, of the total coal consumption,
99.6 percent was in industrial sector and 0.4 percent was in residential sector.
Alternative Energy
HMG has introduced Renewal Energy Subsidy System 2000 with the objectives of sustainable development of alternative energy
and ensure energy supply in rural areas, development of small industries and professions through energy technology and thus
uplift economic and social conditions of the poor people and to maintain regional balance and to reduce environment problem
caused by destruction of forest in rural areas. Similarly, HMG has introduced Renewal Energy Subsidy Guidelines 2000 to
efficiently mobilize and streamline grant fund received from different donor agencies. With a view to provide loans out of
the grant received from Danish Government for solar energy and small hydroelectricity, an internal fund has been created
and different activities have been initiated by the Alternative Energy Promotion Center.
Biogas
Installation of bio gas plant has been continued in the current FY. In FY 2000/01, total number of plants installed was
4,197 under the loan of Rs.98.38 against the target 15,800 plants at the cost of Rs.138.93 million. During the review
period current year Rs.32.767 million has been invested by ADB/N for the installation of 1600 plants.
Micro-Hydropower
Micro hydropower plants serve very useful purposes of relieving local forests from exploitation of fuel wood and harnessing
unutilized water source. The constructions of low capacity micro hydro power plants are continuing in current FY. In HY
2000/01, micro hydropower of 80.5 kW plants generating capacity were installed with the investment of Rs.3.831 million. In
current FY 2001/02, target was to install such plant to generate 500 kW by investing Rs.27.5 million by ADB/N. During the
review period, only 199 kW capacities had been installed with the investment of Rs.11.0 million.
Solar Energy
By topographical region, Nepal's solar energy potential has been estimated as 607-kwh/Sq.-meter/ day' in the Himali region,
6.33 kWh in Hills and 7.07 kWh in the Terai. National average of such potential is 4.5 kWh. These potentials remain very
little exploited. In FY 2000/01, 508 solar energy systems were installed by investing Rs.11.192 million by ADB/N. In
current FY 2001/02, only Rs.7.76 million has been invested for installation of 394 units against the target of investing
Rs.39.0 million.
Forestry
Among the known natural resources forest is considered as next to water resources. It has become essential to improve,
expand and conserve forests to meet daily need of fuel wood and construction materials as well as enhance revenue and
ecological balance. Among major projects and program being implemented, National and Leasehold Forestry in 26 districts,
Churia Forestry Development (GTZ) in 3 districts, Forestry Conservation & Plant-Genetic Center (DANIDA), Community
Forestry Development (DANIDA) in 3 districts, Forestry Program for Livelihood (DFID) in 7 districts, Environment and
Forestry Enterprises (USAID) in 8 districts, Sindhu-Kavre Forestry Development (AUSAID) in 2 districts and Natural
Resources Management Sector (DANIDA) in 17 districts are the major once. Likewise, National and Leasehold Forestry
Development, Community Forestry Development (DANIDA), Natural Resources Management Sector Program (DANIDA) and Herbs
Development Programs are being carried out as national priority projects.
A total of 1161 User groups (FWGs) were formed and 52,245 hectares of community forest have been transferred to the local
level under the Community Forestry Development Program in FY 2000/01. The Program has benefited 98,685 families. During
the review period of current FY, 230 users groups have been formed to manage 10,350 hectares of forest and transferred to
those groups. The program has benefited 19,550 families. Under the Leasehold Forestry Program, a total of 119 FUGs were
formed in 8 Districts of the Hills and 2 districts of the Terai in FY 2000/01. A total of 46,004 hectares of community
forest was transferred to FUGs. During the review period of current FY, a total of 13 FUGs were formed in 24 districts if
the Hills and 2 districts of the Terai where programs were in operation. During the same period, initial works have been
completed for transfer community forest to the FUGs.
In FY 2000/01, a total of 78,18,000 tree saplings were produced against the target of 93,41,000 saplings under various
programs and projects by forming 230 FUGs. Of this total, progress against the 24 targets set was as following: Department
of Forests including the Community Forestry Development Program produced 24,77,000 saplings against the target of 26,10,000, by Hill Leasehold Forestry and Grazing Development Project produced 10,95,000 saplings against the target of 17,00000, by
the National and Leasehold Forestry Project produced 19,54,000 saplings against the target of 2,100,000 and other various
projects produced 21,52,000 against the target of 2,671,000. In addition, the Forestry Products Development Board produced
1,40,000 saplings against the target of 2,60,000 with the total of 7,818,000 saplings produced 83.7 percent of the target
have been achieved during the year. In current FY, production target of 80,59,000 saplings has been fixed under above
mentioned on going programs managed by the Department of Forests (79,19,000 saplings) and Forests Product Development
Board (1,40,000 saplings). The necessary works has been completed for producing these saplings during the review period of
this year.
In FY 2000/01, 82 percent (2,229 hec.) of the afforestation has been achieved by various projects and programs under the
Department of Forest (target 2,605 hec.) and the Forest Product Development Board (target 111 hectors). During the review
period of current year, preliminary works like clearing and fencing are underway in 2502 ha. set as targets under various
programs.
In order to reduce the pressure of natural calamity such as flood, land slide and soil erosion, and to maintain ecological
balance by protecting the important watersheds implementation of various programs are underway. Of the programs launched
are: Bagmati Integrated Watershed Management Project (EU) in 5 districts, Watershed Management Project (DANIDA) in 3
districts, Sindhu- Kavre Soil Protection Program (AUSAID) in 2 districts, Upper Andhikhola Watershed Management Project
(CARE/N) in 1 district, Community Development and Forest/ Watershed Management Project (JICA) in 2 districts,
Shiwalik-Bhawar Watershed Protection Project in 9 districts, Soil Protection Program in 27 districts, Sustainable Soil
Management in 4 districts, Upper Chhaldi Pahad Watershed Project (SDC) in I district. The Government has adopted the policy
to carry out all works relating to watershed management through the user's committee to mobilize people's participation.
In order to involve local people for the protection and development of herbs in the mountain region and to increase their
opportunities of income generation, the government has adopted the policy of cultivating herbs in leasehold forest,
community forest and in private forest as well. Recently, herbs conservation project and herbs development program have
been launched to this effect. In FY 2000/01, herbs cultivation was carried out in 1197 hec. of land, which include 456
hectors under leasehold forest, 656 hec. Under Herbs Production and Processing Company and 85 hec. Under private sector
management. Current year's goal is to expand the cultivated area by 751 hec. under the management of Community Forestry.
Herbs Production and Processing Company and private sector. In FY 2000/01, herbs equivalent to Rs.44.2 million was sold.
During review period of current year, herbs worth Rs.4.76 million have been sold.
National Parks and Wildlife Conservation
During the review period of the current year, the total area covered by the National Park and Wildlife Conservation
increased to 18.3 percent of the total land of the, country as against 18.1 percent in FY 2000/ 01.
As per the revenue sharing policy of the Government, fifty percent of the revenue raised from the Royal Chitwan (RCNP) and
the Royal Bardia National Park (RBNP) are being made available to the buffer Zone community development works. Accordingly,
Rs.75.77 million to the RCNP and Rs.13.63 million to the RBNP were disbursed by FY 2000/01 to the user groups concerned.
Rs.7.02 million released to the Langtang National Park remains yet to be spent. While only Rs.50.2 million and Rs.4.9 have
been spent by the RCNP and RBNP respectively out of those disbursed amounts.
In pursuance of the policy of promoting tourism in conversation areas, Tourism Management Plants for RCNP and RBNP are
already approved. Such plants also for the Kanchanjunga Conservation Area and the She-Phoksundo National Park are under
preparation.
HMG has adopted the policy of allowing hotels and lodges to operate in buffer zone only. Accordingly, new hotels will be
located in these zones and the existing ones operating outside the buffer zones will be asked to relocate their after the
expiry of there contracts. More than 40,000 people have benefited from the various programs of community development,
income generation and skill training conducted in the areas. Such programs are operating in nine conservation areas.
The Timber Corporation of Nepal, entrusted with institutional marketing of traditional fuel wood and timber, sold 550,000
cu. ft. of logs, 20,600 cu. ft. of sawn timber, and 8,353 piles of fuel wood in FY 2000/01. During eight months of the
current FY. The Corporation sold 169,400 cu. ft of logs, 6,000 cu. A. of sawn timber and 165 piles of fuel wood.
Population and Environment
According to the census of 2001, population growth of the country during the period 1991-2001 increased by 2.24 percent and
total population of the country in 2001 has reached to 2,31,51,423. The high population growth is due to high fertility
rate. Recently completed Nepal Population and Health Survey (2001) by the Ministry of Health has revealed that the
fertility rate of Nepal has remained at 4.1 children per woman. If the annual population growth rate of 2001 is to be
continued, Nepal's total population will be double within 31 years.
In line with the long term target of reducing fertility rate to 2.1 percent level by the year 2016, the Ministry of
Population and Environment, with a view to properly manage existing population, has initiated policies and carried out
institutional reform programs in the FY 2000/2001 and 2001/2002. The policy reforms can be feasible through interregional
management efforts. Therefore different actions have been initiated in this regard. These include, gradual integration of
population management aspects in different regional development activities. As boys and girls play prominent role in the
demographic profile, different activities will be conducted by focusing them. Dissemination of population related
information, and expansion of education and communication among groups who does not have access to mass communication will
be launched by mobilizing local NGOs. Advocacy programs will be initiated among policy makers and other stakeholders
Population management efforts will be expanded at the local level under the leadership of VDCs in line with local
self-governance. Towards the institutional reforms, a section dealing with young boys and girls will be established in the
Ministry of Population and Environment. Program targeting teenagers (aged 10-19) and youths (aged 15-24) will be conducted
in an integrated manner. Attempts are also underway to coordinate various programs relating to population management by
establishing committees of the Secretariat of National Population Committee and the establishment of Ministry of Population
and Environment as national focal point.
In FY 2000/2001, two projects relating to national program and national census and environment information, education and
communication were initiated by the Ministry of Population and Environment. In 80 places of 20 VDCs of Rautahat districts,
different programs were initiated by mobilizing 20 NGOs and cooperatives focusing to such groups who do not have access to
mass communication. These included informal population education camp, weekly and fortnightly awareness program through
mass media such as radio, television and FM radio. These programs also included production and distribution of messages
through different radios and televisions transmissions. Production and distribution of books, calendars and posters and
publication of four monthly Tuki Magazine were also undertaken. These materials were distributed to all VDCs and secondary
schools. Various district and regional level seminars and programs on Population and Development Integration were also
conducted. During the revised period of current year, most of these activities have been given continuity.
In FY 2000/2001, pollution index was prepared and electrical board, air pollution monitoring centres were established and
benchmarks for air, water and sound were also prepared. In FY 2001/2002, in addition to giving continuation to these
programs, green sticker program as demanded by municipalities, namely, Biratnagar, Birgunj, Pokhara, Bhairawa, and
Nepalgunj were introduced. In current FY, programs such as environment impact assessment, long term environment policy
formulation, land use and protection and promoting public awareness are under way.
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