Partners: World Bank, International Finance Corporation
Client: Nepal Electricity Authority
Sector: Energy, Electricity
Project Duration: 2021

VRock analyzed the overall demand and supply of electricity in Nepal, with a decade long horizon. The analysis included, among other things, seasonality variations and the potential for power trade. Also, the study assessed the availability of hydropower/energy project funding for public and local financing energy projects and the underlying reasons behind timely execution of projects in Nepal.

The demand supply assessment is inherently a challenging undertaking given the complex interdependencies in the energy sector. The extended time horizon over which such forecasts are required because of the long lead times for planning and developing electricity infrastructure further adds to this complexity. In Nepal, where the power generation is predominantly hydro based, the seasonal variation in generation complicates the task of power sector planners and financiers.

Similarly, meeting Nepal’s investment needs for its energy infrastructure (about USD 2 billion per year over the next 15 years), for both domestic and export market cannot be met by domestic resources. Nepal will need to assess the domestic resources, public and private that is available for investment in the power sector which will provide an estimate for how much external capital will need to be mobilized.