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Residents of Balkot area in Suryabinayak Municipality-3, Bhaktapur, were hit by a power outage that lasted for several hours on Tuesday morning. The morning routine of office workers and students were affected as a result. Many families did not have access to water because they could not use the water pump. 

When the residents tried to call ‘No Light’ service of the Nepal Electricity Authority (NEA), the line, as always, was unresponsive.  

“We could have prepared accordingly, had we been notified about the power outage,” said Roshan Dahal, a local resident. “We tried calling the ‘No Light’ number, but no one answered.” 

But NEA Spokesperson Suresh Bahadur Bhattarai claimed that the ‘No Light’ was a 24/7 service. 

“We have a human resource crunch which might have led to unresponsiveness,” he claimed.

Abrupt and frequent power cuts have become common across the country in the recent months. The NEA officials say this is primarily due to maintenance works that are currently underway in different parts of the country. 

While the power utility has issued a ‘Maintenance Shutdown Schedule’ on its website, it does not match the time of electricity outage. Moreover, the schedule only concerns Kathmandu Valley; it does not tell when the maintenance works are being carried out in other parts of the country. 

It took five hours or so for the power to restore in Balkot. The local residents did not find out why there was an outage in the first place.    

Earlier, load shedding was primarily limited to industrial areas, but from the past few months, even households are facing frequent power cuts.

According to a research report published in May 2022 by the Confederation of Nepalese Industries (CNI), 64 percent of Nepal’s industries are forced to install diesel generators due to frequent power outages. The use of generators, as per the paper, results in an average increase of 5.3 percent in the industries’ monthly operation costs.

Between 2008 and 2016, the whole country suffered from unreliable power supply, sometimes up to 16 hours a day. According to the study entitled ‘Economic costs of electricity load shedding in Nepal,’ the country lost an estimated $11bn value of its GDP in that period. 

During the load shedding period in Nepal, the NEA used to publish weekly power outage schedules and update it regularly. 

Load shedding or not?

The recent power cuts have led many people to suspect that the NEA has imposed ‘undeclared load shedding.’ 

“When there was officially announced load shedding in Nepal, the NEA used to provide the weekly schedule of power outages,” a netizen posted on Facebook. “But now, the NEA neither admits to load shedding, nor provides regular electricity, compelling people to think if the days of load shedding are back.”

The NEA officials claimed that there is no load shedding, since the country has been generating surplus electricity during the rainy season. 

As of now, the total installed capacity of hydropower plants operational in the country is 2,759 MW. However, the national peak demand is only 1,806 MW. Yet, there are regular power outages.

Delay in the construction of transmission line

The NEA officials attribute the intermittent power cuts to the delay in constructing transmission lines. The construction of Hetauda-Dhalkebar-Inaruwa 400 kV and Hetauda-Bharatpur-Bardaghat 220 kV transmission lines has been ongoing for more than a decade, significantly surpassing the initially planned completion time of three years.

The delay in the construction of these transmission lines has also hit the country’s hydropower sector.  

Representatives of Madhya Bhotekosi Jalavidyut Company Ltd have said that the project would miss the generation deadline by at least one month. 

“We have already encountered several delays owing to local obstructions and natural disasters,” said Ram Gopal Shiwakoti, the company’s CEO. 

Initially, the project had planned to complete the project by the end of 2022, which was pushed to mid-June. 

“Our revised electricity generation schedule is September. Due to the delays, the project cost has escalated by Rs 2.75bn,” added Shiwakoti.

While the project’s work is almost complete, the actual generation cannot commence until the transmission lines are completed. 

Due to the delay in constructing high-capacity transmission lines, the NEA official said, the authority is currently transmitting only around 80 MW of electricity using its old transmission system. The new lines would have supported the transmission of up to 300 MW. 

The construction of a 400 kV transmission line is essential for transmitting electricity to western Nepal from the Dhalkebar substation. The existing 132 kV transmission line in Hetauda is unable to carry sufficient electricity to supply the western region. As a result, the NEA is unable to meet the demand and purchase electricity from independent power producers.

Poor infrastructure

Mukesh Kafle, former Managing Director of the NEA, said that the delay in the construction of new transmission and distribution lines is not the only reason behind power outages. 

“The Nepal Electricity Authority needs to replace its overall system. The time has come to invest in replacing all the channels including substations and feeders,” he said.

Without the system overhaul, Kafle warned, their situation will get worse in the future.

Meanwhile, the NEA has instructed the Independent Power Producers (IPPs) to reduce their energy generation, claiming that around 170 MW of electricity from 20 hydroelectricity projects is going to waste. 

Ganesh Karki, president of Independent Power Producers’ Association Nepal (IPPAN), said that the only solution for regular electricity flow is installation of modern distribution and transmission lines. 

“The government should not leave all the work of infrastructure development to the electricity authority. It should also intervene when necessary to control the problem of power spillage,” he said.

Karki added Nepal has finally become power surplus at least in the wet months, so the time has come for the government and investors to focus on infrastructure development.

“Earlier, everyone was focused on power generation because we were way behind our producing capacity. And since infrastructure development was never our priority, we do not have a reliable distribution channel to supply electricity.”

The price of gold has dropped by Rs 600 per tola in the domestic market on Wednesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow metal is being traded at Rs 112, 400 per tola today. It was traded at Rs 113, 000 per tola on Tuesday.

Meanwhile, tejabi gold is being traded at Rs 111, 850 per tola. It was traded at Rs 112, 450.

Similarly, the silver is being traded at Rs 1,460 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 28. 59 points to close at 2,077.58 points on Tuesday.

Similarly, the sensitive index dropped by 5. 13 points to close at 396. 72 points.

A total of 6,015,067-unit shares of 262 companies were traded for Rs 1. 92 billion.

Meanwhile, Super Madi Hydropower Limited was the top gainer today with its price surging by 4. 60 percent.

Likewise, Kisan Lagubitta Bittiya Sanstha Limited was the top loser with its price dropping by 6. 54 percent.

At the end of the day, the total market capitalization stood at Rs 3. 05 trillion.

Competitiveness and competence of Nepal’s IT services industry have grown tremendously in the past few years with the country exporting IT services worth $515.4m in 2022.

A new report by Institute for Integrated Development Studies (IIDS) on the Nepali IT industry shows IIT service exports accounted for 1.4 percent of the country’s GDP and 5.5 percent of the foreign exchange reserves.

The report shows Nepal is gradually making strides in IT service exports, especially through an increment in software development and digital services through offshore outsourcing.

The report titled ‘Unleashing IT: Advancing Nepal’s Digital Economy’ says IT services exports witnessed a whopping 64.2 percent growth in 2022. “Both IT companies and freelancers experienced substantial growth, with IT companies recording an 80.5 percent increase in service exports and freelancers achieving a growth of 55.2 percent,” says the report.

The report, the first of its kind to map the Nepali IT services export industry throws many interesting facts. There is significant involvement of youth in the IT sector, with 83.5 percent of freelancers working in the IT sector falling within the age bracket of 20-29.

Among the IT companies operating in Nepal, 75.3 percent are solely registered within the country, while 24.7 percent are registered both in Nepal and abroad. The primary areas of export services provided by Nepali IT companies include programming, coding, design, software development, and testing. A significant majority (78 percent) of the companies receive project-based work, although they express a desire for long-term assignments despite currently taking on monthly or hourly task-based work. Around 58.3 percent of the companies frequently receive export services work, with approximately 28.4 percent experiencing no operational issues. However, 12.3 percent of the companies only receive occasional assignments.

In terms of clients, 77.8 percent of IT companies receive assignments from the United States, followed by Europe, the United Kingdom, and Australia. However, there has been a shift in the trend in recent times, with more companies working with countries in Asia and the Middle East, such as the United Arab Emirates, Bahrain, Bangladesh, Bhutan, Indonesia, Japan, the Republic of Korea, Malaysia, Singapore, and Thailand.

Approximately 44.4 percent of the companies have been co-founded as private limited companies, while others operate in partnerships with international companies or as sole proprietorships in certain cases. Among the partnerships, 87.5 percent exclusively involve Nepali partners, 3.1 percent foreign partners, 6.3 percent both Nepali and foreign partners, and 3.1 percent involve both Nepali and Non-Resident Nepalis (NRN) partners.

“The surge in IT services exports has contributed to the economy and created employment opportunities for IT professionals,” says the report. There are over 106 IT export services companies and 14,728 IT freelancers in software development and technology and 51,781 Information Technology Enabled Services  (ITeS) freelancers engaged in exporting IT services through various digital platforms.

With growing prospects for exports, there has been a promising growth trend in both revenue and investment in the IT industry.  The revenue growth signifies that a high number of companies are successfully offering IT services to international clients, resulting in a higher influx of foreign exchange into the country.

On average, the yearly salary for IT workers in Nepal is $2,810 (Rs 365,300) at the entry-level, $6,395 (Rs 831,350) for the mid-level, and $15,322 (Rs 19,91,860) for the senior-level. Currently, the estimated number of jobs generated by IT service export companies is 7,228 and there are 66,509 online freelancers.

The report shows a gender divide in the number of hired employees. There is a stark gender disparity in terms of hiring regular and full-time staff, favoring men over women. As per the report, 84 percent of the employees (both full-time managerial and technical staff) are men while the remaining 16 percent are women.

According to Dr Amrita Sharma who led the study, reliable supply of electricity and internet connection are major challenges in Nepal. “With the growing demand for IT services, strengthening IT infrastructure should be the keen focus,” said Sharma.

The number of data centers in the country must be increased to secure data storage and management as well as enable remote access to data, disaster recovery, and energy efficiency.

According to the report, in order to boost the growth of Nepal’s IT sector, it is essential to provide the industry with adequate financial support across three major areas—research and development, investment support to start-ups and scaling up successful companies, and the creation of efficient payment systems. The lack of funding for early-stage financing and company incubation has hindered the growth of IT startups. “As many startups are struggling, early-stage funding is crucial,” said Sharma.

In Nepal, the IT sector, according to the report, presents an opportunity for contributing to steady economic growth in the digital era. “Unlike such sectors as tourism, hydropower, and agriculture, which could face challenges due to geographical limitations and competition from neighboring manufacturing hubs, IT service exports can thrive with fewer challenges,” says the report.