This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/2/2019

Overview

Nepal’s large hydropower potential represents an enormous opportunity for U.S. companies, including in direct foreign investment and/or joint ventures, as well as in the sale of equipment and provision of consultancy services.  Nepal’s hydropower sector is open to foreign investment.  Nepal has some 83,000 megawatts (MW) of hydroelectric potential – more than 40,000 MW of which is commercially viable – but only about 2 percent (less than 1000 MW) of this capacity has been developed. 

Although Nepal has greatly reduced power outages in the past year, Nepal still faces some power shortages especially during the peak winter season, and electricity needs are increasing 13 percent annually.  A high voltage cross border transmission line connecting Nepal to India is being upgraded to expand cross border electricity trade and has helped increase Nepal’s supply of electricity.  More lines are planned.  Nepal signed a long-awaited Power Trade Agreement (PTA) with India on October 21, 2014.  The PTA opened up India's large – and growing – power market for Independent Power Producers (IPPs).  In addition, the Investment Board of Nepal (IBN) signed a Power Development Agreement (PDA) with two Indian power developers in 2014, for the first time allowing a foreign developer to build, operate, and export the power produced.  With dozens of hydropower projects in the works, there are opportunities for equipment sales and engineering and design consulting services.

The April 2015 earthquake inflicted major damage to a number of power plants operating in districts adjoining Kathmandu.  These plants require major repair and maintenance work, and some have announced reconstruction plans worth millions of dollars.  Major reconstruction projects offer opportunities for equipment sales and engineering consulting services for U.S. companies.
Water Resources Equipment and Services (U. S. $ thousands)
 

 2014201520162017
Total Local Production  0000
Total Exports  0000
Total Imports   513,317.84  427,394.04873,660.84    1,000,000
Imports from the US    9,454.40    6,477.82  8,558.93 
Total Market Size    513,317.84427,394.04873,660.84  1,000,000
Exchange Rates    98.5599.79106.65107.92
(total market size = (total local production + imports) - exports)
Total Imports:  Trade and Export Promotion Center, Nepal
Imports from U.S.:  Trade and Export Promotion Center, Nepal

Leading Sub-Sectors

Foreign Direct Investment for hydropower power projects
  • Consulting services
  • Hydropower generation machines
  • Turbines
  • Generators
  • Power control machineries
  • Surveying instruments
  • Transmission wires
  • Heavy machinery and earth moving equipment

Opportunities

Prospects in hydropower equipment sales and consultancies include:  the construction of the 900-MW Upper Karnali Hydroelectric Project, which is being developed by a consortium of GMR Energy Ltd., India, and the Italian-Thai Development Project Company of Thailand; the 456-MW Upper Tamakoshi Hydroelectric Project, which is being developed by a Nepali consortium; and the 900 MW Arun-III Hydro Electric Project, which is being developed by the Indian company Satluj Jal Vidyut Nigam Limited.  Equipment imported for hydropower projects is assessed a special lower customs duty of only 1 percent.

Web Resources

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.