Friday, December 28, 2018

New public debt management office, energy banking between Nepal and India, and more

From The Kathmandu Post: Nepal and India have agreed to set up an energy banking mechanism that will prevent spilling of electricity generated in the country when production surpasses demand, a situation the domestic energy sector is expected to face in a few years’ time. Energy banking involves exchanging electricity for electricity instead of cash. Under this mechanism, one country exports electricity to the other when it has a surplus, and imports back the same amount of energy when it has a deficit.

Nepal Electricity Authority (NEA), the state-owned power utility, and Central Electricity Authority (CEA) of India on Wednesday agreed to the draft of the guidelines on power exchange. The draft will be presented for approval before the energy secretary-level joint steering committee (JSC) meeting scheduled to be held in January.

Nepal had long been advocating energy banking saying that seasonal complementarities of demand and supply of electricity in Nepal and India will make the mechanism a suitable model of power transfer. As a majority of power plants in Nepal are run-of-the-river type, they generate a large amount of electricity during monsoon. The surplus coincides with a sharp rise in demand for electricity in the Indian states of Uttar Pradesh, Haryana and Punjab due to increased power consumption in the farm sector.

From The Himalayan Times: Paddy productivity is estimated to go up by 8.6 per cent in the current fiscal year to 3.8 tonnes per hectare on the back of favourable monsoon, timely availability of fertilisers and use of modern tools and equipment. Paddy productivity stood at 3.5 tonnes per hectare in 2017-18, according to the Ministry of Agriculture and Livestock Development (MoALD). With the growth in productivity, paddy output is expected to hit an all-time high of 5.6 million tonnes in the current fiscal year, up 9.8 per cent than in the last fiscal year, data released today by the MoALD show. Nepal grew 5.1 million tonnes of paddy in the last fiscal year. The jump in paddy production is expected to raise total agricultural production, as the crop makes a contribution of over 25 per cent to overall agricultural output.

Investment summit in March 2019

From myRepublica: The government is organizing a second investment summit in March next year. Organizing a press meet at the Ministry of Finance on Thursday, Minister for Finance Yuba Raj Khatiwada, who is also the coordinator of the summit organizing committee, said that the two-day Nepal Investment Summit 2019 will kick off on March 29. The summit, among others, aims at promoting Nepal as a lucrative investment destination, according to officials of the Investment Board of Nepal (IBN), which is the coordinating agency of the event.

The government had hosted the first investment summit in March last year. The summit had secured investment pledges worth US$ 13.74 billion. However, most of the pledges have been limited to paper as not a single letter of intent (LoI) has materialized as real investment so far. Speaking at the press meet, Finance Minister Khatiwada, who is also the vice-chairman of the IBN, said that the summit was being held with an objective to translate the country’s long-term development ambition into achievement. “The summit will also help to share with investors what we have done to make the country more investment-friendly,” he added.

IBN CEO Maha Prasad Adhikari told Republica that the investment summit is a part of the government’s initiatives to attract foreign direct investment. Asked why another summit was needed when the investments pledged of the last summit was yet to realize, Adhikari said that the IBN along with other government agencies are following up with the investors. According to Adhikari, over 25 percent of such LoI is in the process of realization. 

>>My take on the proposed investment summit here

Nepal establishes Public Debt Management Office 

From The Himalayan Times: Government has established the Public Debt Management Office with a view to manage public debt in an integrated manner. Finance Minister Yubaraj Khatiwada inaugurated the office in Putalisadak amidst a programme here today. The office established as a subordinate body of the Ministry Finance will function autonomously. Prior to this, Nepal Rastra Bank (NRB) dealt with proceedings related to internal borrowings and Public Debt and Investment Section at the Office of the Auditor General owned the responsibility of managing external and domestic debt.

The newly established office will look after works relating to debt management including some works of the Finance Ministry. According to Office Chief, Bishnuraj Dhakal, the office will support effective implementation of the government’s fiscal and monetary policies. It will invest in public enterprises and recover loans.

Moreover, it has been given the additional responsibility of looking after some tasks relating to the internal and external debt executed by the International Cooperation Coordination Division and Economic Policy Analysis Division of the Ministry of Finance. It has also been assigned to prepare a draft of the public debt policy. On the occasion, the Finance Minister expressed hope that the government’s fiscal and monetary policies will become more effective with the office coming into operation.