Nepal Rastra Bank Governor Deependra Bahadur Kshetry has said that private sector banks in Nepal have no capacity to invest in big hydropower projects. 
He said that the private banks don´t have adequate money for long-term investments in such projects. “Currently, the total deposit in commercial banks in our market is worth Rs. 547 billion. That amount is not enough for investing in big hydropower projects,” the central bank governor said during the Fourth International Hydro Power Convention held in Kathmandu on Sunday.
Under the Priority Sector Lending program, commercial banks are providing loans for investors who invest in small hydropower projects with generation capacities of up to 50 kilowatts. But according to Kshetry, commercial banks are not interested in providing loans for big projects.
Last a year, a consortium of private commercial banks led by Himalayan Bank Limited reached an agreement with Nepal Electricity Authority (NEA) to invest Rs. 6 billion for the 309 MW Upper Tamakoshi Hydropower Project. That is the biggest investment made by Nepali commercial banks in the hydropower development sector.
Uttar Kumar Shrestha, executive director of NEA, urged the government to provide its guarantee for the mobilization of investment in big projects through energy bonds and debentures.
Sandip Shah, president of the Independent Power Producers´ Association Nepal, urged the government to clear legal hindrances for investors. He said that the government should exempt all types of taxes for investments in the hydropower sector for at least the next 10 years.
Indian Ambassador to Nepal Rakesh Sood underscored the need for strong commitment towards hydropower development from the political leadership. He said that there needed to be support for investors at the local levels and called for adequate infrastructural development, including the building of access roads and transmission lines at the projects sites.
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