Look before you leap…

A World Bank mission arrives in Nepal in mid-May to appraise the feasibility of the modified Arun III scheme, affectionately known as "Baby Arun". This rather oversized baby is still small fry in the eyes of the World Bank, but Baby Arun has serious implications for Nepal´s future development path.

If the World Bank is truly committed to the development of Nepal, surely it should be looking at ways of helping to build up local capability rather than perpetuating the cycle of dependence on foreign aid and offering a convenient channel for the marketing of Western goods and services. The objective of gigantic power projects should not be measured merely in terms of the number of megawatts produced, but on the establishment of greater capability to produce power, in order to continue the cycle of development.

Neither the Nepal Electricity Authority (NEA) nor the country itself has the capability to take on a project as large as Baby Arun. Consequently, all the technologies, expertise and funding will be shipped in from abroad. The aid package is almost entirely tied to the provision of goods and services from the donor countries.

There is another way. There is a far more practical, cost-effective and environmentally sound approach to hydropower than the current obsession with large-scale projects that are driven by the donor. By investing in smaller schemes using local capability, more power can be generated more quickly from the U$ 764 million budgeted for Baby Arun. Through this approach, load shedding could be overcome in five to six years instead of the ten to twelve anticipated with Baby Arun.

We need to move steadily forward in manageable steps, rather than leaping uncontrollably ahead. This would give the local hydro industry a chance to grow and mature, developing a solid base from which Nepal can eventually achieve self-sufficiency in hydro-power. Baby Arun may well be appropriate in 10 years time when local industry can take it on confidently, but Nepal simply is not ready for it now. Evolution, not revolution, is what is needed.

Other countries which rely heavily on hydropower, such as Norway and China, have successfully adopted this evolutionary approach to power generation, and still gain significant percentages of their total power from smallscale schemes. In Switzerland early this century, more than 99 percent of its power plants generated less than 750 kW each. The success of these hydro programmes is largely attributed to policies of decentralisation and local management in these countries. China was able to achieve a 3000 fold increase in its small-hydro capacity in 27 years.

The potential for Nepal´s hydro industry to follow a similar path is already apparent. Over the last 25 years, local capability has been steadily growing and maturing. It took the Butwal Power Company (BPC) 12 years to build up its capacity to produce equipment and expertise for the 1MW Tinau scheme. Over the next dozen years, that capacity has grown to more than 50 MW, BPC recently signed an agreement to build the 60 MW scheme at Khimti, which it will build at almost a third the cost per kW as that projected for Baby Arun. Nepal should be looking to consolidate its expertise with schemes of this size before moving on to more ambitious projects.

Engineers at the Nepal Electricity Authority (NEA) themselves have never had a chance to design and build their own schemes. As the Authority takes on larger and larger turnkey schemes, these engineers, many of them trained at the world´s best universities, are reduced to serving as ´counterparts´ to contractors.

It is well within our capability to meet the country´s ever-increasing energy needs without looking to outside support. Using Nepali engineering expertise at NEA and in private power companies like the BPC, 25 to 30MW of hydropower can be added to the grid every year. With sustained growth, in ten years´ time, figure could reach 100 MW a year.

Not only does this new approach offer the chance to eliminate load shedding within a few years and increase the amount of energy available on the national grid, but far more Nepal is will be able to enjoy the benefits of electricity. A strengthened hydro industry will not only be able to provide larger schemes (such as Khimti) to fuel the urban centres, but will also enable micro- (up to 100 kW) and mini-hydro (up to 1 MW) schemes to flourish in the rural areas with no grid attachment, giving a boost to local economies.

Hydropower is not a simple commodity like oil or coal—you cannot just dig it up and sell it; the actual process of harnessing the power is critical. It isn´t an easy route, but we are already well on the way to understanding and developing that process in Nepal. If we miss this opportunity to develop hydropower through local industry, we will condemn urban Nepalis to escalating electricity prices and periodic power shortages, and will deny many rural Nepalis access to electricity.

Baby Arun´s malignancy lies not in the dam itself, but in the context of its conception and realisation. You cannot leapfrog your way through the development maze. Arun´s rotten core perpetuates the cycle of donor dependency and the stifling of indigenous capacity and creativity. There is a cure, but its strength is finite and will fail to work if the malignancy is allowed to spread any further.

Bikash Pandey is member of the Alliance for Energy, a Kathmandu group that seeks to educate on hydropower issues. Janet Bell is with the Intermediate Technology Development Group, London.