(Candidates for the 21st Falgun election are reaching out to the public with their manifestos. They are presenting their agenda. At this time, Kantipur is starting a special series ‘Kantipur Bimarsha: Manifesto’ to present the people’s agenda to parties and candidates. You too can write a manifesto for this series, focusing on a specific area. We will give space to manifestos that are based on facts, figures, and logic.)

Nepal's energy sector is at a sensitive and decisive juncture in its economic history. After decades of load shedding, dependency, and unreliable supply, civil life, industry, and the entire economy are finally starting to breathe. 

The increase in power generation capacity and the acceleration of large and small projects in recent years have signaled a qualitative change in the energy system. With the completion of projects under construction, a large portion of energy is certain to be incorporated into the system. On the one hand, this transformation has instilled new hope and confidence, but on the other hand, it has also added new structural risks and challenges. If these serious issues are not addressed in a timely manner, there is a risk that today's achievement will also turn into a 'white elephant' or burden, just like yesterday's shortage. 

In such an environment, the energy debate can no longer be limited to the mathematical discourse of 'megawatts'. How much has been produced or how much is being added? This figure may be important, but it is not the complete truth. Because production is only a means, not a goal. Our energy policy should now draw a clear roadmap on the issues of qualitative utilization, equitable distribution, competitive pricing, strategic trade, and systemic risk management rather than the volume of production. If we continue to entertain the illusion that increasing the production graph is the ultimate success, it will not take long for this achievement to become a factor in a major systemic crisis for tomorrow. 

For the common citizen, energy is not just a means to ‘light up’ in the evening – it is the fuel for cooking, the irrigation of fields, the speed of factories and ultimately the lifeline that generates income.  It is now inevitable to understand energy policy not only as a technical issue, but also as the main driver of economic transformation. Energy is not just physical infrastructure - it is the backbone of industry, agriculture, the service sector, employment, and overall national productivity. Industrialization is unimaginable in the absence of energy, but if energy is available and cannot be properly managed and utilized, the very foundation of industrialization will collapse. Therefore, energy policy should not be narrowed down to a limited agenda of the Ministry of Water Resources or Energy, but should be established at the state level as a 'long-term strategic departure point' that will accelerate the overall economy. 

The fact that energy is the most direct and sensitive link between the state and the citizen is often overlooked in our policy debates. For the common citizen, energy is not just a means to ‘light up’ in the evening – it is the fuel for cooking, the irrigation of fields, the speed of factories and ultimately the lifeline that generates income. On the other hand, for the state, energy is the fuel for development, the basis of revenue and a strategic national asset. Due to this deep relationship, citizens immediately feel the shock of small deviations or weaknesses in energy policy, which are directly reflected in public trust in the state, the effectiveness of public services and social stability.

The most disturbing aspect of today's energy debate is the wide gap between the policy level and the citizen experience. Our policymakers are still looking at energy only through the lens of big project dreams, export potential, and geopolitical diplomacy. Ironically, at the citizen level, energy has become synonymous with high tariffs, unexpected obstacles, and inequality of access. Especially in the remote Himalayan and hilly regions of Nepal, a large population is forced to live in the dark even in today's digital age due to the inability of the national transmission line to reach them.

Even where electricity has reached, the problem of 'low-voltage' makes it impossible for factories to operate, nor is it possible to use household appliances easily. While the center is raining megawatts, citizens are feeling excluded from the state's development story due to low voltage and uncertain cuts in remote settlements. Unless the foundation of policymaking is aligned with the daily struggles of ordinary citizens, the practical needs of domestic industries, and regional economic realities, the progress achieved in the energy sector is certain to shrink to mere government papers and statistical achievements. 

Of course, some increase in consumption can be brought about through the promotion of electric stoves, vehicles, and household appliances, but this effort will not be sufficient to maintain systemic balance and fully utilize the energy produced.  In fact, the main challenge facing the energy sector today is not only to increase production volume, but also to manage the multifaceted risks after production. While production capacity is increasing, our policy and institutional mechanisms to address its industrial use, strategic trade, competitive pricing, and deepening financial risks are extremely weak and narrow. The truth that we must understand is that production itself is not the ultimate standard of success. The ability to make the energy produced safe, sustainable, and economically profitable is the only indicator of real success. Ironically, this lack of institutional strength and managerial skills is pushing our energy sector towards a new and serious risk vortex today. 

At the heart of our energy crisis is the lack of strategic balance between domestic consumption, industrial use, and foreign trade. Projections show that within the next five years, the ‘surplus electricity’ of the rainy season is set to almost double compared to the present. However, it would be a suicidal delusion to think that this huge amount of energy can be consumed only by household consumption. Of course, some increase in consumption can be brought about through the promotion of electric stoves, vehicles and household appliances, but this effort will not be enough to maintain systemic balance and fully utilize the energy produced. Until we accept this harsh reality, our energy policies will remain only imaginary and impractical.

Electricity trade is no longer just an option for Nepal’s energy future, it has become a decisive and indispensable link. Energy trade with neighboring India has opened the door to unlimited opportunities for us, but over-reliance on a single market has also brought the footprint of strategic risk equally close. It is worth remembering that electricity trading is a matter of technical timing, seasonal cycles, strong grid access and complex market regulation, where Nepal is not always in a strong position to ‘bargain’. If this surplus energy of the rainy season cannot be exported on time, its negative ripple effect will not be limited to the energy system alone. It is certain to create a terrible pressure on the banking and financial sector and the entire national economy. 

The existing financial structure of hydropower projects has made this risk even more serious. In recent years, a large number of projects have been financed through initial public offerings (IPOs). This means that the direct risk of project failure or trade disruption is no longer limited to the promoters, but is gradually shifting to the savings of ordinary citizens and the national financial system. Even small uncertainties in the export market can cause a landslide in the income of projects, which will erode the ability to repay debts and ultimately push the banking sector towards a serious crisis. Therefore, a small policy deviation or wrong decision in the energy sector is no longer just a technical error, it has emerged as a serious ‘national security risk’ linked to overall financial stability.

Viewing energy development and industrialization as two separate islands is the biggest strategic mistake today. An increase in energy production is meaningful only when it opens the door to industrial expansion, creates new employment opportunities, and lays a strong foundation for a sustainable ‘value chain’. The state must integrate and directly interrelate energy policy with industrial policy without delay. Otherwise, this energy, not the fuel of development for us, is sure to turn into a heavy burden of financial risk. The main task today is to build a bridge between production and industrial demand, accepting the fact that systemic balance is not possible only by the rattan of domestic consumption expansion.

To convert the surplus electricity of the rainy season into economic benefits, planned and strategic development of energy-intensive industries is now indispensable. Sectors such as chemical fertilizer factories, cement, steel, agro-processing, data centers, moisture storage, and electric transportation have the potential to not only absorb large amounts of electricity but also give a new impetus to the economy. The promotion of such industries not only helps in import substitution, but also creates permanent employment, balanced regional development, and a strong foundation for exports. Unless the energy policy puts these industries on its main agenda with concessions and clear priorities, excess production will continue to cause only short-term headaches for the country, not a long-term solution. 

 While neighboring Bhutan focused on strengthening its internal system before choosing the path of energy exports, Vietnam made industrialization the center of its energy policy. The secret to the success of these countries is to integrate energy production with industry and make exports only an alternative means of managing excess electricity.  Dreaming of making energy exports sustainable without expanding the base of domestic industrial consumption is actually an unrealistic dream. International experience and successful practices have also confirmed this truth. While neighboring Bhutan focused on strengthening the internal system before choosing the path of energy exports, Vietnam made industrialization the center of its energy policy. The secret to the success of these countries is to integrate energy production with industry and make exports only an alternative means of managing excess electricity. Until Nepal also places energy trade on the foundation of industrial development, our energy exports will always float on an uncertain wave of dependence and risk. 

The increasing politicization of Power Purchase Agreements (PPAs) and Project Development Agreements (PDAs) in the energy sector has made the overall systemic risk even more frightening. Approvals given on a whim without a thorough assessment of the real needs of the power system, load balancing, and financial risks will ultimately only lead to long-term economic instability. Strategic tools like PPAs/PDAs should be based purely on technical needs and feasibility. They should not be made a tool for cheap popularity, pressure from influential people, or momentary political gains. Large projects should not be carried out just for political ‘stunts’ or discussions, but only with a strict focus on the balance of the energy system and long-term national economic benefits.

The root of some of the complexities prevalent in the energy sector lies in the weak regulatory structure. Therefore, establishing the Electricity Regulatory Commission (ERC) not just as a paper organization, but as a fully autonomous, technical and capable regulator is the key issue today. The ‘ERC’ should be able to play the same role as the Nepal Rastra Bank for the stability of the financial sector. The commission should be able to take independent decisions on the issue of electricity tariff 

(tariff) determination, market management and consumer protection, free from any political influence or interference. Remember, when the regulatory body is weak and innocent, then distortions and unrest flourish in the market, the final economic burden of which ultimately ends up on the shoulders of innocent consumers. 

The fact that electricity tariff determination is not a matter of cheap political maneuvering, it should be based on hard economic realities has now become clear as day. Undoubtedly, it is the responsibility of the state to provide energy subsidies to the poor, but such assistance should be borne directly by the government through ‘targeted subsidies’. It is never justified to politicize the tariff structure and impose an unfair financial burden on the authority. If tariff determination is not made scientific and practical, the financial health of the Nepal Electricity Authority will collapse, which will definitely have a direct negative impact on the quality of service, system strengthening, and ability to make future investments.

It is too late to transform the Nepal Electricity Authority into a fully professional, transparent, and customer-friendly organization. The board structure of the authority should be built not on the basis of political proximity or access, but on the basis of pure technical expertise and high managerial capacity. In the absence of leadership stability, professional autonomy, and clear accountability, any organizational reform will remain limited to paper. We must understand that until such structural reforms are made within the authority, it will be meaningless to envision the successful implementation of the state’s so-called big energy policies and the expected results.

The institutional weakness within the Ministry of Energy has now emerged as a long-term problem in the sector. When a sector of high technical and strategic importance like energy is run on the back of ‘temporary transfers’ and employees from unrelated backgrounds, both policy continuity and institutional memory have collapsed. We must understand that energy policy is not a limited agenda of a single political term, but a series of strategic decisions that will affect the future of the nation for decades. Therefore, imagining meaningful reforms in the energy sector without developing a ‘specialized energy cadre’ within the ministry and ensuring professional expertise in the bureaucracy will be like pouring water on sand.

The question of ‘generation mix’ for Nepal’s energy future has now become unavoidable. Although hydropower is our main strength, the natural reality of rapid decline in production during the winter months has highlighted the need to promote solar energy as an essential complementary source. What we need to understand is that hydropower and solar energy are not competitors to each other, but rather complementary forces for the balance and stability of the system. The goal of national energy security cannot be achieved without strategic coordination and integrated development of both these sources to avoid energy shortages in the dry season and manage ‘peak demand’.

It is now imperative that we adopt a strategic, phased and financially realistic approach to place Nepal’s energy future on a solid and stable footing. Projects like Dudhkoshi (about 670 MW), Upper Arun (1,067 MW), Budhigandaki (1,200 MW) and Paschim Seti (about 800 MW) are not just physical structures. These are ‘game changer’ infrastructure that will sustain Nepal’s energy system for decades. 

The national resolve and commitment to build all these projects is unwavering, but trying to move them forward at the same time and in the same format is not a practical and responsible idea. The prudent path forward is to implement these in a phased manner based on project readiness, market demand and financial capacity. For this, the state should prioritize speeding up the approval process, resolving obstacles permanently and creating an environment that instills complete confidence in investors.

The Budhi Gandaki project requires not only investment, but also deep structural and innovative thinking. The government has already spent about 45 billion rupees on compensation and preparation so far, and an additional 400 billion rupees is needed for this project.     The Dudhkoshi project appears at the forefront of the proposed action plan, as it is a domestic demand-centric project that is mature in terms of preparation and financial structure. In the context of the loan commitment from partners like the Asian Development Bank, the goal of completing work such as PPA and land acquisition and starting construction within a year is entirely realistic. The strategy of involving Nepali investors only after risk mitigation will ensure both the safety of domestic capital and public confidence. On the other hand, Paschim Seti is a strategic export-oriented storage project, where the Indian developer ‘NHPC’ is involved. To accelerate this, a clear roadmap is required for the overall development of the Far West, realistic resolution of obstacles in the export market and finalization of the Project Development Agreement (PDA) within a year.

The Budhi Gandaki project requires not only investment, but deep structural and innovative thinking. The government has already spent about 45 billion rupees on compensation and preparation so far, and an additional 400 billion rupees is needed for this project. The main challenge here is not the lack of capital, but how the project is structured. It is neither fair nor sustainable to impose the entire cost of such multi-purpose national infrastructure on energy consumers alone. Therefore, it should be taken forward through the principle of cost sharing by all sectors that will directly benefit, the adjustment of public-private capital, and management free from political interference. If necessary, it would be a financially responsible step to call for public investment only after risk mitigation, with the help of ‘Validate Gap Funding’ (VGF) and bilateral partners.

The Upper Arun Project is the real ‘crown jewel’ of Nepal’s hydropower potential, whose strategic importance can be compared to Ethiopia’s ‘GERD’ or America’s historic Hoover Dam of the 1930s. This project should be developed not on the basis of momentary emotions, but with strict discipline and national capacity. A clear policy is needed to raise capital from Nepalis employed domestically and abroad and to bring in strategic partners to ensure export markets. It will be a balanced decision to embark on the main construction of the Upper Arun only after the construction of Dudhkoshi has begun and the financial roadmap for Budhi Gandaki is clear. In the meantime, it will be beneficial to continue preparatory work such as the construction of access roads and invest sufficient time in financial management and partner selection from the perspective of long-term security.

The decisions taken in the energy sector today are not just technical choices, but strategic decisions linked to Nepal’s national economic security and the future of future generations. Energy policy should no longer be held hostage to cheap popularity and superficial slogans. Rather, it is imperative to lead on the path of responsible, factual and institutional strengthening. Only when energy development and industrialization move hand in hand, will energy become cheap and reliable for the citizens, and for the state, it will become the main basis for import substitution and job creation. Otherwise, institutional reforms and production growth without long-term thinking will push us not towards economic transformation, but rather towards a vortex of serious financial risks. 

It is the policy courage and honesty we make today that will lead Nepal of tomorrow towards a bright and self-reliant economy, because today's small mistakes in the energy sector may have to be paid for by future generations for decades. (Radhesh Pant is a former banker and chairman of 'V-Rock & Company'. He is also the former CEO of the Investment Board of Nepal)