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Central region highest in hydropower royalties


Kathmandu, December 26, 2016: Among the five development regions in the country, the central development region is the largest royalty recipient from the hydroelectricity projects in last six years, the royalty distribution database at the Department of Electricity Development shows.

The central region has so far received Rs 1.99 billion from the royalty paid by the hydropower plants and the amount is annually disbursed to the District Development Committees by DoED.

Two hydropower plants (totalling 92 MW) of Kulekhani reservoir and some other plants in Nuwakot, Upper Bhotekoshi in Sindhupalchowk and Khimti Hydropower in Ramechhap and Dolakha have made this region the richest.

The western region comes second receiving Rs 1.82 billion in the same period of six years. The 144 MW Kaligandaki Hydropower Plant is the largest hydropower plant both in the region and the country and two other plants — 69 MW Marsyangdi and 70 MW Madhya Marsyangdi Hydropower Plant — also contribute a significant amounts in royalties to the region.

As the per existing system, the district development committees of the region where a hydroelectric project is in operation receive altogether 50 percent of the royalty, which should be spent mainly for rural electrification, and the remaining 50 percent royalty goes to the government treasury.

The districts where the plant is located get 12 percent of the royalty allocated for the region and the remaining royalty is distributed equally among other districts in the region.

Each hydropower project pays Rs 100 per kilowatt of electricity [installed capacity] per year and two percent of average price it earns by selling electricity for the first fifteen years of generation to DoED, according to the Electricity Act 1992. From the 16th year onward, the royalty rate is calculated based on Rs 1,000 per kilowatt of installed capacity per year and ten percent of the average price they earn per unit.

The mid-western region has only the project, 12.5 MW Jhimruk Khola Hydropower Project in Pyuthan while the Farwestern region is yet to receive any royalty as there was no power plant in the region until last year. It is the Naugadh Khola (8.5MW), that is the first hydroelectric project to be completed in the Farwestern region. The project started generation last year but DoED has yet to distribute the royalty earned from the project. The central region is likely to further surpass others in terms of earning electricity royalty after the completion of the 456 MW Upper Tamakoshi Hydropower Project in 2018.

By Rudra Pangeni