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The new leadership at the Nepal Electricity Authority (NEA) has launched a renewed effort to collect long standing disputed dues related to dedicated and trunk power lines. On Friday, the Authority issued a public notice calling on customers with outstanding dues to file appeals by June.

The NEA stated it aims to resolve the disputes—which have remained unresolved for nearly a decade—by addressing misunderstandings from a new perspective. The decision to move forward was made at a Board of Directors meeting on May 4. According to the NEA, total disputed dues now amount to Rs 23.44bn.

To facilitate dispute resolution, the NEA has amended Sub-regulation 2 of Regulation 55 under its 2021 Electricity Distribution Regulations. Under the revised provision, five percent of the billed amount can be submitted either in cash or via a Class A bank guarantee valid for one year.

The dispute began in 2016 after NEA introduced new tariffs for dedicated and trunk lines. In 2018, approximately nine months after load-shedding ended, NEA sent backdated bills covering two years and seven months. Industrialists contested the charges, arguing they had received trunk line facilities without formal notice and were billed as though load-shedding continued. Most only paid regular bills, rejecting the additional charges.

NEA regulations stipulate that customers seeking 20 hours of uninterrupted electricity via trunk lines during extended load-shedding must apply in advance, with service granted only after NEA Board approval. Customers are also required to provide Time-of-Day (TOD) meter data, which the NEA must verify.

To address the dispute, NEA formed a task force which submitted its findings. In 2019, the parliamentary Accounts Committee also intervened. A subcommittee recommended that the Commission for the Investigation of Abuse of Authority (CIAA) probe NEA officials for failing to enforce tariff regulations, leading to revenue losses. The subcommittee also urged NEA to implement provisions requiring payment within 35 days of billing or disconnection after 60 days of non-payment.

Multiple committees have since examined the issue. In 2024, a commission led by former Justice Girish Chandra Lal submitted a report directing the government to recover Rs 6.11bn in dues from Feb 2016 to May 2018. NEA’s notice mentions plans to collect this amount as well.

Former NEA Executive Director Kulman Ghising had also attempted to collect these arrears per the commission’s recommendations, but government intervention stalled the effort.

Pokhara, a city celebrated for its shimmering lakes and natural beauty, needs saving from rampant environmental degradation. Pollution has been escalating at an alarming rate, severely impacting the indigenous communities whose livelihoods depend on the lake water. Despite their tireless efforts, a sustainable solution remains elusive, highlighting the urgent need for action to conserve the lakes.

Shobha Shrestha, a resident of Damside on the eastern shore of Fewa Lake, recalls the time when the lake’s crystal-clear waters rippled gently, filling her with a sense of calm. “You could drink the lake water without any worry,” she says. “You can do that now because of pollution.” 

Shanti Pahari, a resident of Khahare, shares similar sentiments. She leads a local women’s group that has been actively involved in the Fewa cleaning effort.“The pollution never stops, no matter how often we clean the lake,” she says. “The lake is turning into a sewage dumping site.”

Lake pollution has also hit the local fishing communities. Mina Jalari, who belongs to a fishing community of Khapaudi, says their daily catch has significantly declined over the years. Just a decade ago she used to catch up to 30 kg of fish in a day. “These days, you are lucky if you catch 5 kg of fish. Our traditional occupation is at risk,” says Jalari.

Deforestation of Panchase Forest, which serves as an important lifeline for Fewa, has also contributed to disrupting the lake’s ecosystem. “Illegal logging, poaching, and wildfires have become common,” says Durga Bahadur Ghale, who is part of a local anti-poaching unit. “Our mission is to protect the forest because it is home to many plant and animal species and plays a key role in maintaining Fewa’s ecological balance.”

Rupa Lake, once famous for its abundant lotus flowers, has also seen a drastic decline in its aquatic flora in recent years.“Lotus plants thrived along the shores just a decade ago, but now they are found in only small patches,” says Ganga Gurung, who presides over Rupa Women’s Group. The loss is ecological and cultural. Locals have been using lotus flowers and plants for traditional remedies. Now, such practices are fading.

The Rupa Restoration and Fisheries Development Cooperative has been working to conserve biodiversity while supporting local livelihoods. However, over the past five years, environmental challenges have taken a heavy toll.

Last year, the cooperative earned Rs 15m from fish sales, but this year, losses have climbed to Rs 4m. Shivraj Adhikari, president of the cooperative, notes that without any revenue, they will be unable to fund projects like pesticide-free farming, women’s economic empowerment, and watershed conservation.“We have dedicated our lives to preserving this lake, but the outcomes are not so promising these days,” he says.

The plight of Pokhara’s lakes reflects a broader environmental emergency—one that threatens not only the natural landscape but also the people whose lives depend on it.

According to a 2020 report by the Gandaki Provincial Government and Pokhara Metropolitan City, Fewa covers 5.7 square kilometers (11,000 ropanis) and has an average depth of 8.4 meters. However, a 1998 survey by the Survey of India recorded Fewa’s area at 22,000 ropanis—double its current size.

Despite continuous cleanup efforts by locals and environmental groups, pollution and encroachment in Fewa continue unabated. 

“I have seen the lake shrink over the years. The areas that were once underwater are now above ground level,” says Khagendra Gurung, a local man.

Unrecognized community sacrifices 

Around 20 years ago, 200 families gave up their farmlands to conserve Maidi Lake, a wetland habitat known for its ducks and herons. The construction of a check dam overflowed the lake, submerging their fields. However, they have yet to receive any compensation. Instead, invasive weeds have proliferated, affecting the lake’s ecosystem. 

“Unwanted weeds have taken over the lake and very little has been done to conserve the wetland,” says Kriti Ballabh Tripathi, who surrendered 14 ropanis of his land for the wetland conservation program. He regrets giving his farmland for which he hasn't been compensated yet. 

In Dipang Lake, locals faced a similar crisis when invasive weeds took over the water. Their call for help went unanswered, so they formed a lake conservation committee and launched a campaign to remove the weeds from the lake. Their campaign lasted for nearly five years, during which they raised around Rs 50m with the help of local individuals, organizations, and institutions to clear the weeds. 

“We transformed Dipang from a mere pond into a proper lake, but since then, continuing conservation efforts has not been easy,” says Ramji Lamichhane, founding chair of the committee.

Despite their tireless efforts to protect the surrounding wildlife and vegetation, he says no governmental or private entity has shown interest in supporting their conservation efforts.

In Begnas Lake, the local Jalari (fishing) community dedicates one day per week to voluntary labor cleaning the lake. They have also formed a committee for forest and wildlife conservation. But their efforts have gone unrecognized.

In Rupa Lake, plummeting fish stocks have prompted the locals to appeal to all three levels of government for help. But they haven’t received any proper response. “It pains us that even the local government has failed to take an interest in solving our problems,” says Adhikari, the president of Rupa Restoration and Fisheries Development Cooperative. 

Even when programs related to lake conservation are implemented, the local government fails to involve the locals. The Fewa Damside Community Development Organizations has been organizing lake clean-up and tree plantation campaigns for decades now, but its members say they have received little to no support from their local government.

Shrinking lake

Environmental experts estimate that 14,200 tons of silt accumulate in Fewa Lake annually. Rapid spread of water hyacinth in Pokhara’s lakes is clear evidence of pollution. As waste accumulates in the lakes, essential nutrients such as nitrogen and phosphorus increase significantly, disrupting the wetland ecosystem. The excessive presence of these nutrients leads to a decrease in plankton, which is crucial for the aquatic ecosystem. 

A study conducted in 2023 by the Journal of the Nepal Chemical Society found that the average phosphate level in Pokhara’s lakes is 0.0036, while the nitrate level is 27.156—both exceeding the standards set by the World Health Organization (WHO).

“As nitrogen and phosphorus levels rise, the growth of invasive water hyacinth also accelerates, causing an imbalance in the lake’s ecosystem,” says environmentalist Anil Suvedi. 

Water hyacinth reproduces at an alarming rate, doubling in number every week. From a single sapling, around 1,200 offspring can be produced within four months, and in one year, its biomass can reach 18,000 metric tons per hectare.

With a population of around 400,000, Pokhara’s main settlements are intersected by the Firke and Bulaundi rivers, which have turned into major carriers of urban sewage due to rapid urbanization. Carelessly discarded waste flows into these rivers through drains, eventually ending up in Fewa Lake. The use of pesticides in farming, along with chemical runoff, further contributes to the pollution of the lake’s surrounding environment.

Additionally, hotels and houses near the lake have built sewage outlets and septic tanks directly connected to the lake, further worsening the situation, according to environmentalists.

“Unplanned development projects conducted without proper environmental impact assessments have also led to soil erosion, increasing sediment deposition in the lake and affecting both its size and ecological balance,” says Suvedi.

Campaign by civil society

The civil society of Pokhara organizes at least two annual lake clean-up events, during which they remove a minimum of 30 truckloads of water hyacinth and plastic waste from Fewa Lake alone. 

“Yet, the pollution in the lake has not decreased,” says Narendra Man Lalchan, president of Civil Society Kaski. “People still need to understand that polluting the lake directly impacts the entire ecosystem surrounding it.”

A few years ago, this civil society launched a grand campaign for environmental protection. Under this initiative, hundreds of social organizations and groups in Pokhara joined hands to address the problems of wetland areas. Over 1,200 social organizations—including women's groups, community development organizations, various professional associations, governmental and non-governmental bodies, the army, and the police—are involved in this campaign. 

Pokhara Metropolitan City consists of 33 wards. Each fiscal year, the Metropolitan Executive Council approves and allocates budgets for an average of 70 plans (programs) from each ward. However, many wards do not include environmental conservation programs. In the current fiscal year, approximately 2,500 programs have been included in Pokhara Metropolitan City’s ‘Red Book–Plan and Budget Allocation Document’. Among them, only 56 programs—just 2.24 percent—are related to environmental conservation.

Under the environmental promotion program for the current fiscal year, Pokhara Metropolitan City has allocated a budget of Rs 583m for 13 programs. Additionally, under tourism and cultural promotion, around Rs 200m has been allocated for five programs related to environmental beautification. This accounts for only about 1.5 percent of the total budget.

As of mid-February, no contracts for these programs have been awarded, and the tender process has not yet begun. The Urban Development, Tourism, and Environment Division of Pokhara Metropolitan City stated that the Detailed Project Report (DPR) for about 20 percent of these programs is still in progress.

According to Division Chief Bimal Ranjan Karki, the lack of skilled technical personnel and experienced contractors has hindered the implementation of several programs despite the intent to execute them. Since the last fiscal year, the metropolitan city has assigned projects worth less than Rs 5m to consumer committees, while larger projects are handled by contractors.

The government showcased different projects with a target of attracting investment commitments of over Rs 600bn during the third Nepal Investment Summit held in Kathmandu on 28-29 April 2024. However, most of the projects showcased during the event failed to attract serious interest from investors.

One year on, the Office of the Investment Board Nepal (OIBN) has admitted that foreign investor response has fallen short of expectations. “Although many projects were showcased during the summit, investor interest has not materialized as anticipated,” said Pradyumna Prasad Upadhyaya, the spokesperson for the OIBN. He, however, added that overall sentiment toward investing in Nepal remains positive. OIBN is the specialized government body to handle projects above Rs 6bn and hydropower projects exceeding 200 MW. 

Nepal first organized the investment summit in 2015, primarily to support post-earthquake reconstruction. The first summit generated commitments of around Rs 1.4trn whereas the second investment summit held in 2019 saw investment pledges worth Rs 3.2trn.

Investors from China, India express interest

Neighboring countries China and India have shown willingness to invest in select projects. Chinese investors are close to signing a Project Development Agreement (PDA) for the Damak Clean Industrial Park. They have also shown interest in the Panchkhal Special Economic Zone (SEZ) in Kavre and submitted a proposal to start a processing zone in Nuwakot. Meanwhile, Indian investors have proposed establishing an edible oil company in Janakpur and submitted proposals for IT parks around Chobhar, Khumaltar and Nuwakot, along with a solar energy project.

The Muktinath Cable Car, spanning roughly 81 km from Birethanti on the Kaski–Parbat area to Muktinath Temple of Mustang is also moving forward. The project is currently in the environment impact study phase with the Detailed Project Report finalized.
Other progressing projects include the long-stalled West Seti Hydropower Project and the SR6 hydropower project, which is close to the final DPR submission stage. The OIBN has also received a proposal for a fertilizer plant in Bardaghat that will consume 300 MW.
Upadhyaya said they have received proposals for unique projects like seabed mining. Korea’s railway company, KORAIL, has shown intent to invest in Nepal’s railway sector. “Though exact figures on the investments received are not available, many project negotiations have made significant progress,” he added. Former OIBN CEO Sushil Bhatta, who led the Board during the third summit, explained that large investments often begin with expressions of interest and take time to materialize. “Rather than asking how much investment has come, we need to evaluate how projects are progressing,” he said.

FDI inflow of Rs 141bn

Since the third Nepal Investment Summit, Nepal has attracted Rs 141.14bn in foreign direct investment (FDI). However, this inflow is not directly tied to projects showcased at the third summit. Most investments are in projects under the Rs 6bn threshold. Before the summit, the government amended several investment-related acts via ordinance. 

The private sector had previously identified 52 acts and regulations as barriers. Although most of these legislations were revised, lack of accompanying procedures and guidelines has slowed progress in implementation. “Investors frequently ask us why procedures and directives have not followed legal amendments,” said a senior official from the Ministry of Industry, attributing delays to poor coordination among government agencies.
Upadhyaya said while drafts of some working procedures are in progress, the OIBN’s limited autonomy, having to rely on the Prime Minister’s Office for decisions, has complicated matters. “Policies evaluated by the OIBN are often misunderstood or delayed by other agencies,” he said.
Former OIBN CEO Bhatta said that procedural, legal and institutional reforms must be followed by behavioral reforms to ensure smoother project transitions. “Our credibility will be enhanced if projects in the pipeline goes into implementation as per the set timelines,” Bhatta said. “We also need to learn from international experiences on these aspects.”

Will graylisting affect FDI?

Nepal was recently placed back on the Financial Action Task Force (FATF) “gray list” for deficiencies in curbing money laundering and terrorist financing. Though this does not block investment outright, it can raise doubts among investors. “Nepal needs to address these concerns seriously,” said Upadhyaya: At a time when investor interest is growing, reputational risks could affect future FDI flows.

Europe Day is a powerful reminder of the day, 75 years ago, when Europe chose cooperation over conflict. In the aftermath of a war, we chose peace. And that choice became the foundation of the European Union.

Today, more than ever, that choice continues to guide us. In a world full of uncertainties, people across the globe are suffering because of climate change, conflict and inequality. The need for a just and lasting peace in Ukraine has not diminished. Conflict in the Mideast continues to bring misery to millions. Closer to us, an increasingly hostile climate threatens lives and livelihoods.

There are currently more live conflicts than at any time since World War II. Despite, and perhaps because of these conflicts, Europe Day should inspire us today to believe in and work for peace and unity.

The European Union remains a strong voice for peace, and we are proud to call Nepal a trusted and valued partner in that journey. Together with our member-states, under the Team Europe approach, we stand alongside Nepal in its efforts to pursue the transitional justice process in the spirit of reconciliation and permanent peace. As a trustworthy friend, we also stand with Nepal in its efforts to avert climate crises and respond to natural disasters.

In its challenging quest for prosperity, Nepal can also count on the EU. Nepal’s graduation from Least Developed Country status in 2026 means it needs to attract investment to foster economic growth. This is not an easy task when migration has become the path of choice for so many Nepali youth. But a solid commitment to improving the investment climate is crucial for realizing Nepal’s considerable economic potential and creating the business and employment opportunities young people need to build the future Nepal.

The European Union is supporting Nepal’s prosperity agenda through its “Global Gateway” initiative, together with the European Union member-states and European Development Finance Institutions. Global Gateway can support Nepal’s progress and narrow the investment gap through smart, clean and secure investments in quality infrastructure and connectivity.

In a rapidly changing, increasingly fragmented world, international cooperation has turned into global competition. The EU also needs to become more strategic and resilient. But we stand firm on the universal values we have built together with the UN since 1945, and on our commitment to multilateralism. As global challenges grow, so does our determination to remain a reliable, consistent, and principled partner. So tonight, as we celebrate Europe Day here in Nepal, let us also celebrate what connects us. The friendship between our peoples. The commitment to a more peaceful and just world. The belief—borne out of our own experiences—that cooperation can overcome even the toughest challenges.

The author is the EU Ambassador to Nepal