South Asia

Nepal energy scheme for power crisis

School children in Nepal
Image caption Nepalese school children have become used to working by candle light

The government of Nepal has launched a $275m (£169m) initiative to bring an end to the country's energy crisis within five years.

It plans to build power plants and give tax breaks for investors.

Nepal has about 12 hours of power cuts a day because of its overwhelmed power grid, forcing many industries to close or reduce their operations.

Finance Minister Bharat Mohan Adhikari said the aim was to produce an extra 2,500 megawatts of electricity.

Despite having massive hydro-power potential, Nepal produces less than half its electricity needs.

A 10-year civil conflict between Maoist rebels and the state, which ended in 2006, has meant that there has been little investment in Nepal's power sector.

On top of this, the country's power supply was badly affected after the destruction of electricity transmission lines during the Kosi River floods in 2008.

This means that load-shedding - when the authorities shut down power to a particular area in order to conserve electricity - has become a factor of daily life.

The government says that under its plan, Nepal will be free from load-shedding within five years.

It says that it will also

  • waive custom duties for materials related to produce solar power
  • make better use of existing thermal plants
  • waive tax on private investors building new hydroelectric power plants
  • encourage the private sector to produce power from rubbish

The government also said it would provide special security for investors and introduce laws to make it a crime to hamper energy construction projects, punishable by five years in prison.

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