Abhigya Malla Reflects on the Power Summit 2023: How to Broaden Nepal's Green Energy Markets

[00:00:00] - [Speaker 0]
Namaste and welcome to Pods by PEI. This is Saurabh Lama. Today's episode is going to be on the recently concluded Power Summit twenty twenty three. So, just a quick request, we already have featured quite a few episodes on Nepal's electricity and energy sector. So, if you would like to get an in-depth understanding of our energy sector, I would highly recommend that you go back and listen to them.

[00:00:23] - [Speaker 0]
Now, let's get into today's show.

[00:00:38] - [Speaker 1]
Namaste and welcome to Pods by PEI, a policy discussion series brought to you by Policy Entrepreneurs Inc. My name is Lusta Josi. In today's episode, we have PEI colleague Saurav's conversation with Abhijya Maula on the recently concluded Power Summit twenty three and how to broaden green energy markets in Nepal. Ms. Abhiqa Mola is a professional accountant and a hydropower development professional associated with Union Mewa, Hungukoda and Upper Tamar A hydropower projects.

[00:01:10] - [Speaker 1]
She serves as the Vice President of High Himalay Hydro Construction Pvt Ltd. She is also an Executive Committee Member of the Independent Power Producers Association Nepal She has a Master's in Professional Accountancy and a Master's of Commerce and Finance from Macquarie University Australia. We hope you enjoy the conversation.

[00:01:36] - [Speaker 0]
Abhiqya, welcome to Pods by PI. It's great to have you here. How are you doing today?

[00:01:40] - [Speaker 2]
Thank you. I'm doing well. Thank you for having me right after the Power Summit. I'm really excited to reflect on it.

[00:01:48] - [Speaker 0]
So shall we get on with the show then? Sure. So first, let me start by congratulating you and the entire Ipan team on the successful conclusion of the Power Summit twenty three. I myself had the pleasure of attending the event as well and thoroughly enjoyed listening to experts professionals working within the Nepali energy sphere. So to bring our listeners on the same page, what is the Power Summit and what has been the history of EPAN's flagship event?

[00:02:15] - [Speaker 2]
Thank you for the question. Basically Power Summit is Nepal's largest power sector event. This was the eighth edition. So we as private developers wanted to come together and have an independent operating non profit organization to cater to the needs of the hydropower developers. And when we talk about the history, like I was saying, it is basically to align with the needs of the private sector developers.

[00:02:44] - [Speaker 2]
Before EPAN started, there was no such organisation that caters to the need of the private sector or lobby with the government. So I would say, if we look at it, first we started with powering opportunities, then harnessing power, then it went to hydropower submitting and increasing the pace of hydropower in development. In 02/2016, we had 10,000 megawatt in ten years, and then powering the Asian century, and now we had broadening the green energy market.

[00:03:16] - [Speaker 0]
So thank you very much for elaborating on this flagship event. So staying on the topic of the Power Summit twenty three, you mentioned that this year's event centered around the theme, broadening green energy markets. Now, I'm aware that you're also part of the Ipan executive committee, so you're most certainly the right person to ask this. What was the motivation or rather the context of the Nepali energy and electricity sector behind the decision to select this particular theme for the latest iteration of the power summit.

[00:03:49] - [Speaker 2]
When we look at the power sector history, this time we are energy surplus in the wet season. So our current need is to find a market that is beyond our domestic market. So basically, it's cross border trade. We are already doing a cross border trade, but in very negligible quantity, would say that is three sixty four MW only. We have to look for a broader market because we are going to be surplus almost already 600 MW in the upcoming wet season.

[00:04:25] - [Speaker 2]
For that to not spill, we needed to find a market. So that is why we chose this theme, broadening green energy market. And as we can see, the neighboring countries, they don't have much of a green energy. They have more of their thermal and coal energy. So green being hydro energy is very important for them, not only strategically, but also when it comes to the health of the country.

[00:04:51] - [Speaker 2]
Because as we see in Delhi, we could see the pollution levels. So this green energy is equally beneficial for them so we wanted to broaden the market but not only that but also promote our green energy market which is very much required in the entire region.

[00:05:09] - [Speaker 0]
So also for our listeners now, so who might not be familiar with the power summit or might have missed out on the last event, there are indeed a lot of great topics that were discussed during the event itself, but I wanted to get your thoughts on some of the sessions. So let's start with the topic that you also mentioned in your previous answer, which is the cross border electricity trade. So as a practitioner, what is a particular thought behind this concept? How do you view the prospect of international electricity trade in today's context?

[00:05:43] - [Speaker 2]
Cross border energy trading right now, if we see how it is going, is we're trading in negligible amount. We need to find a bigger market. I don't think by selling $3.64 MW we are going to be sufficient. We have to sell 4,000 MW to be earning at least N200 billion dollars that is going to then help with our trade deficit as well to maybe make it a surplus. Knowing that when we go to a region's power summit or when they come to our summit, what we see is there is a demand in both the ends.

[00:06:28] - [Speaker 2]
One wants to take the energy, one wants to sell the energy. However, when it comes to cross border, again, geopolitics is a major issue. But what I feel is since there is a demand in the region, we should look after each other rather than making this an issue. And electricity security is a problem in our region, so we should move ahead of this or solve the cross border and not see it as a border but an entire region as a whole. Looking at it like that would be a better perspective.

[00:07:04] - [Speaker 2]
And also it will assist each other in terms of development. So what I see is like that balance needs to be there. Then it comes to the favourable policies and regulations And that is not getting there any time, or we don't have an answer to when this issue is going to be solved or when the policies are going to be favorable. So I would say this is rather difficult to tell, and I understand the frustration that I heard in most of the speakers when they said it, because we have financial institutions who are interested to invest in the energy sector. We have private investors and private clients who are interested to take our energy.

[00:07:51] - [Speaker 2]
However, the policies are not favorable and it gets stuck in geopolitics.

[00:07:56] - [Speaker 0]
So how about looking inward then within our country? How about different strategies that can be used to increase our own electricity demand if there are indeed quite a few number of hindrances for cross border electricity trade?

[00:08:12] - [Speaker 2]
See, to be self reliant, I think we have a long way to go. If that is possible, we should be heading towards that creating domestic market. For that, we need to basically switch from traditional way of cooking to changing our entire transmission and distribution line. It is going to be expensive and it is going to take time. However, that will be a nice thing to do because once you're reliant on somebody, you never know when you have to stop being reliant on them.

[00:08:46] - [Speaker 2]
So that will happen only when we subsidise production or industries to flourish in Nepal. And also, there are industries and factories that require electricity, but we are not able to provide them. It's because our grid is not well connected all over. There's transformers issues, there's transmission line issues, tripping happens all the time in some of the regions. So until and unless we don't rurally develop every part of our country and we maximize the use of our energy, I don't see it happening because, if you see the energy generating countries like even Norway where they have a lot of hydro energy, They consume a lot of energy internally.

[00:09:36] - [Speaker 2]
They promote factories and industries to be set up there. They have green energy surplus that they can supply to the regional countries. But if you see the per capita energy consumption is way higher.

[00:09:57] - [Speaker 3]
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[00:10:16] - [Speaker 3]
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[00:10:34] - [Speaker 0]
So the second day of the summit also featured some key discussions on attracting foreign investment in Nepal's electricity development. You yourself have a background in financing, and you've been working within the electricity sector for a while now. So like you mentioned, there are indeed a vast array of different investors who would really like to invest in Nepal's hydroelectricity. But there are certain, definitely certain hindrances for that to happen. So what should Nepal's current strategy be towards bridging this hindrance?

[00:11:07] - [Speaker 0]
How could we leverage our position of such hydroelectricity potential to attract foreign investments?

[00:11:13] - [Speaker 2]
This is an interesting topic for me to talk basically. So there are international institutions that really want to invest in our hydropower project or in this sector. But what we need to understand here is they have specific guidelines that is required to be followed. Especially when I talk about hydro sector, there are thematic bonds and all these different types of bonds that you can get a foreign lending from at a very cheaper interest rate. However, they have stringent environment social guidelines, and you need to follow all these guidelines in order to get the investment.

[00:11:55] - [Speaker 2]
And that increases the cost of our electricity. And that is a major problem at the moment. So what they are looking at is trying to get this gender issue, social issue, environmental issues, and ask us to follow their guidelines in order to get that funds. So to have that fund also, it's not easy, though they want to. And it's not a bad thing to be promoting those things, what they are saying, but however the cost is not going to be cheap.

[00:12:29] - [Speaker 2]
And if our electricity cost is not cheap, it will be difficult to trade because our neighboring countries have cheaper electricity rates. Right now we are competent, but we won't be, I feel, if we have to follow all the stringent guidelines. However, if we see the heated interest of them to invest is good to start with, but we still need to come with a win win situation, and we are trying to work on it.

[00:13:01] - [Speaker 0]
So you mentioned something around international standards, that that that foreign entities often have these very stringent compliances that are required from our Nepali hydroelectric city. So the current discourse is heavily centered around the issue of climate change. So you have you've been working in the electricity for quite a bit, so you must be privy to some of these discussions as well. But I wanted to quickly ask, how much of these discussions within the hydropower space are centered around combating climate change or trying to reduce our vulnerability to climate induced disasters.

[00:13:37] - [Speaker 2]
Because we are a hilly Himalayan region country, so we naturally are inclined to a lot of, climate crisis factors, and a lot of things are applicable to us. And in terms of constructing the project as well, we have to do initial environment examination or assessment And then only we get a green signal to go ahead with the construction of the project. So during that phase only, we have done certain level according to the guidelines, local domestic guidelines. We have done certain amount of research and we do contribute to this, all the factors that you're talking about. But however, I feel what the problem with us is we don't have data for like one hundred years or maybe before that in terms of climate or natural disaster.

[00:14:32] - [Speaker 2]
Most of the countries when they construct projects, they have one hundred years data or something like that. And that helps them to analyse and take precaution. But however, in our country, if you see during every wet season, have problems somewhere or the other surfacing because we don't have data of what it was like fifty years ago or one hundred years ago. That makes us difficult to predict what is going to happen, especially in the higher altitudes. So now when we talk about that is something that we have to do compulsory.

[00:15:10] - [Speaker 2]
But when we talk about something voluntarily, I think we are just heading towards constructing but not looking at these factors because these factors are very important to us and we have to cater to it or upgrade our knowledge in terms of climate issues or what's happening around the world. And maybe it's the right time to implement as well because of our melting glaciers and so many issues happening in the Himalayan region. However, if you ask me the conversion rate, like what you want to know, I feel most of it is in talks rather than in action.

[00:15:53] - [Speaker 0]
So this kind of brings me neatly into my next question. So this is a question regarding one of the topics from the second day of the event. You presented quite an informative session on the best practices in construction of hydropower projects in Nepal. So what are some of the things that we are doing right?

[00:16:13] - [Speaker 2]
When it comes to the practices, what we are doing right, I would say, is creating employment in a very grassroot level by constructing in rural places. Another thing that we are doing is from being heavily inclined in labor intensive strategy, have now shifted to capital intensive. So especially our hydropower projects is tunnel based. So everything that we drill now and also shotcrete, it is now capital intensified. So when we talk about it, like it's been a major shift.

[00:16:49] - [Speaker 2]
And what I am really proud of today is the in house consultants, in house financial institutions, and our in house contractors can build more than 100 MW of projects. In just ten years, we're equipped with all the things that is required for construction domestically. Like our banks have increased in terms of financing, their potential, their capacity. Even the contractors, they have successfully added 86 MW in the grid already. And when it comes to consulting, we have even consulted upcoming 900 MW projects as well with the joint venture partner with the foreign country.

[00:17:33] - [Speaker 2]
But however, if you see, this is happening domestically. And it is the best practice, I would say, because that is something that we need to do if we don't want to be always a trade deficit country. Because sooner or later, I think we should be self reliant, and we are heading towards self reliance when it comes to our practices. Another thing I would like to say is we are following the international contract regulation like the FEDIC or something that is proven in construction. So when there is a dispute, earlier it was difficult to resolve.

[00:18:10] - [Speaker 2]
But now we look at the international guidelines and in terms of when it comes to earthquake, when it comes to natural calamities, what to do. How to settle the dispute was a very important thing that arised, especially when we had earthquake. And now, because we are following those international guidelines, we've solved a lot of issues. So there are a lot of best practices that is happening we are changing in terms of safety as well. Earlier, we were not equipped and we were not aware of how important it is to be safe in the work environment.

[00:18:45] - [Speaker 2]
Now, even in the grassroot level, they know what to do in the hard rock falling area or what to do if there is an accident. And there's also ambulance and clinic facilities in most of the hydropower projects internally as well because safety is given a priority.

[00:19:02] - [Speaker 0]
And conversely, where might be the rooms for improvement?

[00:19:06] - [Speaker 2]
I'd say the room for improvement there's like a lot of space where we can grow such as digitalization, software upgradations, and also using innovative new technology. Like nowadays, a lot of things are shifting. It is evolving. However, in terms when it comes to construction sector, you have to evolve at a faster rate because there are so many things that is going on. Like we see there are so many types of chemicals that you can complete the work in stipulated time or before that also you don't have to wait for it to dry.

[00:19:41] - [Speaker 2]
Like our old way of cementing and concreting can be changed and we can pace up with the construction work. Like if you see our construction work is always delayed or it is never completed, it's because we don't use innovative technology, A. And B, I would say we don't plan well enough. And it's not only if we get technology in, we'll change overnight. What I see is our lack in planning or implementation and not following the steps that we need to follow.

[00:20:16] - [Speaker 2]
We just do it in our own way. And I don't think that is supposed to happen that way. Another thing I would like to mention is all the developers now want to be contractors themselves. I think that is a very bad practice. We should not be doing that because if we don't have a history of something and jumping into the project of any size without knowing the best practices spoils the entire sector.

[00:20:44] - [Speaker 2]
And nowadays what I see a trend is you are a developer, you become a contractor yourself, or anyone is a contractor. And we don't have guidelines in our country that if you're not a contractor or if you don't have experience, you should not be registered. But what I see is here anyone can be a contractor. You don't need to have experience. Can just go to an office and register yourself.

[00:21:11] - [Speaker 2]
And from tomorrow you can start bidding and you get a contract. That does not happen in the large size, but in a smaller level, in a medium level, in your own project that is happening, I don't think that is a good practice. Experienced people should do their work. And in our context, what I don't like is anyone is allowed to do anybody's work. I think that practice should change and there's lots of room for improvement.

[00:21:37] - [Speaker 0]
Thank you very much for painting such a detailed picture of the event. Now moving the conversation further. Following the completion of this milestone event, after all that was discussed, what impacts do you expect this event to bring to Nepal's energy and electricity discourse?

[00:21:56] - [Speaker 2]
So reflecting back at the event, what I can say is we saw interest, a heated interest from financial institution, from international bodies, private sector. There was demand, there's room to supply, everything is there. However, to convert this into business or to convert this interest into cash or this dream into reality requires a lot of work. And I would say what I saw or what we could see in the summit is there is a demand, there is a supply. We met buyers as well.

[00:22:39] - [Speaker 2]
We had an agreement as well, if you remember. We signed a lot of agreements, a lot of megawatts. However, the thing is, it has to still go through regulation policy, through the infrastructure of the government, and they have to decide on a policy as quickly as possible because what I see is every country will be self sufficient if we don't supply our electricity on the right time. The time factor is very important here, but we need to act in policies, cross border issues, and find a market for us. And if the market is already being found and if we have a certain buyer which we could see, which is a private sector of our neighboring countries, Now it's on the government to frame the favorable policy.

[00:23:35] - [Speaker 2]
If that is framed sooner, then anything is possible. However, if we delay it, I feel our neighboring countries will look for alternative energy that is solar, that is also hydrogen. And also maybe importing of electricity from some other country is possible rather than relying on us because we'll be way too late. So what we should do now is act on it. And I humbly request on behalf of EPAN that there has to be favorable policy.

[00:24:12] - [Speaker 2]
We have to sort out this issue very soon. And I request this trading market to open even for the private sector so that will make it possible to go cross border without relying on the government. That is also possible if they don't want to do it.

[00:24:32] - [Speaker 0]
So just now you made a lot of recommendations and also made a request on behalf of PIPAN. But what might be the various challenges again to implement these particular recommendations?

[00:24:45] - [Speaker 2]
I think infrastructure will be a challenge because what I see is it is very difficult for government or even private sector to acquire land for the infrastructure that is needed to supply. It would be better if we start constructing those infrastructure right from now, even if we want to supply, because once we have already electricity connecting to our grid, we need to send it immediately. But if we don't have the infrastructure because we cannot acquire land in the areas where it is needed, it will be very challenging. Even though if we have favorable policies, we want to trade, we have connected the energy in the grid, if we don't have a distribution and transmission channel, then we are way behind. I feel in future the problem is going to be the transmission and distribution problem.

[00:25:39] - [Speaker 2]
It is not going to be a construction of electricity that is going to be a problem like this now. So we should look at the development of infrastructure and also we have to see domestically what we can do. So maybe creating a domestic market alternatively is also a challenge, but has to be done.

[00:26:02] - [Speaker 0]
And finally, coming to the conclusion of our wonderful conversation, are there any words or messages that you would like to convey to our listeners?

[00:26:12] - [Speaker 2]
I'd say keep promoting the sector. I'd say we have a huge potential. And alternatively, I request most of you young entrepreneurs, listeners to come back to the country, grow something, develop something like industries or factories or something like that so that our energy is consumed domestically. It is very important to make a domestic market for our electricity. And for that, the youths need to come back, do something.

[00:26:45] - [Speaker 2]
If there are more factories, industries, new startups, entrepreneurs here, I think we don't need to trade our electricity anywhere because we are just in 2,550 MW. It is not something that is a lot at all when it comes to per capita energy consumption. So to increase the consumption, I think we all youth need to start and make Nepal a productive or an industry based economy.

[00:27:17] - [Speaker 0]
Thank you very much for those messages for our listeners. And thank you, Abhijiaz, once again, for being with us on today's episode of Pods by PEI. I wish you all the very best in your future endeavors.

[00:27:30] - [Speaker 2]
Thank you very much. Thank you for having me once again. Thanks.

[00:27:33] - [Speaker 0]
And that brings us to the end of today's episode. We'll be back same place same time with another brand new episode of Pods by PI. Goodbye.

[00:27:49] - [Speaker 1]
With Obi Kiam Malaw on the recently concluded Power Summit twenty three and how to broaden green energy markets in Nepal. Today's episode was produced by Nizhun Rai with support from Saurav Lama, Kushi Hank, Chedon Konsakar and Ritesh Shakoda. The episode was recorded at BI Studio and was edited by Nizhun Rai. Our theme music is courtesy of Roy Sakyo from Jindabad. If you like today's episode, please subscribe to our podcast.

[00:28:14] - [Speaker 1]
Also, please do us a favor by sharing us on social media and leave a review on Spotify, Apple Podcast, Google Podcast, or wherever you listen to the show. For PS video related content, please search for policy entrepreneurs on YouTube. To catch the latest from us on Nepal's policy and politics, please follow us on Twitter tweet2pei, that's t w w e t followed by the number two and PEI. And on Facebook at Policy Entrepreneurs Inc. You can also visit pei.center to learn more about us.

[00:28:48] - [Speaker 1]
Thank you once again from me, Lusta. We'll see you soon in our next episode.