Syndicate content

hydroelectric power

How much should Bhutan worry about debt?

Yoichiro Ishihara's picture
Bhutan hydropower
Construction of the Dagachhu Hydropower Plant in Bhutan. Photo Credit: Asian Development Bank

In many respects, Bhutan has been a development success story. Its people have benefitted from decades of sharp reductions in poverty combined with impressive improvements in health and education. The country is a global model in environmental conservation. It is the first carbon negative country; Bhutan’s forests, which cover over 70% of the country, absorb more carbon dioxide than is produced by its emissions.

The Kingdom of Happiness also must grapple with the reality of managing budgets, creating infrastructure, and preparing its citizens to be able to create and take advantage of jobs of the future. To do that, we are working with closely with Bhutan to build the foundations for a more prosperous future through the cultivation of a vibrant private sector economy and supporting green development.

At the same time, Bhutan has invested generously in hydropower energy production to create a reliable and lasting source of green energy for its people. It also benefits from exporting excess electricity to neighboring India, whose energy needs continue to increase at a rapid pace with their growing economy.

In large part due to the hydropower investments, Bhutan’s public debt was 107 percent of the Gross Domestic Product (GDP) as of March 2017. Hydropower external debt was at 77 percent of GDP with non-hydropower external debt accounting for 22 percent of GDP. Questions have arisen on whether this level of debt is sustainable and what should be done to address it.

In rural Nepal, tying micro hydropower plants to the main grid brings electricity for all

Bhupendra Shakya's picture
Talti village in Dhading district in Nepal where a MHP scheme has made it possible to open an agro-processing plant
Talti village in Dhading district in Nepal: A new micro hydropower plant has made it possible to open
an agro-processing plant. Credit: The World Bank

Fifteen years ago, I started a new job in the Sindhupalchowk district in Central Nepal. I was working in the rural energy development section of the District Development Committee and supervised technical support for micro hydropower plants (MHPs) in the area.

My job also entailed reaching out to local communities and ensuring they were deeply involved, from installation to maintenance, in bringing micro hydro to their villages.

During my time in Sindhupalchowk, I witnessed firsthand the dramatic and positive changes  hydro-powered electricity brought to people’s lives: houses lit up, radio and television sets came to life, mobile phones were easier to use, schools could run computer classes, small-scale enterprises flourished, and shops stayed open longer and offered more products. Moreover, the newly generated power contributed to improving the working conditions of women employed in local agro-processing mills as mechanical automation replaced labour-intensive manual processing.

For remote rural households not connected to the grid, MHPs have provided ready access to electricity. Still, as the national grid was gradually deployed into rural areas – albeit with little coordination between the Nepal Electricity Authority (NEA) and the Alternative Energy Promotion Centre (AEPC), respectively responsible for the national grid and alternative energy promotion -- villages with both existing MHPs and a new grid connection faced an entirely novel problem.
 
In places like Bhuktangle, Parbat and Righa, Baglung, detailed feasibility studies and construction of MHPs had already been completed when the grid was extended to these areas. As a result, more than 50% of existing customers switched from their MHP-generated electricity services and the ensuing lower electricity usage made it difficult to pay off the loan that was taken out for the building of the plant.  Ten districts in 2010 showed similar patterns as about 11% of MHPs are now competing with the national grid.
 

Nepal: It’s time for the right policies in rural electrification programs

Tomoyuki Yamashita's picture
 
Rural people celebrating commissioning of a MHP in their village
Rural Nepalese celebrate commissioning of a MHP in their village


Working in the renewable energy sector for the World Bank since 2010, I have visited more than 50 Micro Hydropower Plants (MHPs) in rural Nepal. From villages high up in the hills inaccessible by even the toughest 4WD jeeps to settlements perched on steep slopes, to one powerhouse that could only be reached by crossing a cold river with shoes in hand.

And with every community I visited, every family that welcomed me, I felt the same happiness to see them celebrate the commissioning of a MHP in their village. They enjoy evenings and nights as they chat, eat and watch TV with their family under the electric lights.