Government's 30,000 MW Hydropower Goal Faces Legal Hurdles, IPPAN Proposes 'Sunset Law'

Kathmandu. Despite the government setting a target of generating 30,000 megawatts of electricity in the next 10 years, it is difficult to achieve that goal due to current administrative and legal complexities. The Independent Power Producers' Association, Nepal (IPPAN) has concluded that a 'Sunset Law' is necessary to suspend obstructive development laws for a specified period to achieve the target.

IPPAN's Deputy Secretary-General Prakash Dulal stated that not only the Hydropower Act but also dozens of laws related to forests, environment, land reform, securities, companies, and industry registration are hindering the development of the energy sector. He argued that the only option now is to accelerate development by putting aside certain provisions of all these laws for 10 years.

According to Dulal, the Forest Act creates the biggest obstacle to hydropower development. For projects up to 100 megawatts and transmission lines up to 132 kV, the process should be allowed to proceed with initial environmental examination without requiring an environmental impact assessment.

"Currently, the process does not move forward without providing land for tree cutting, causing projects to be stalled for 2-3 years even after a cabinet decision," said Dulal. "A provision should be introduced that allows tree cutting first and provides 2-3 years for land compensation."

He added that approximately 19,000 megawatts of projects are stalled due to the strict laws in national parks and conservation areas, through which most of Nepal's rivers flow. The National Parks Act should be amended to open up hydropower project construction in such areas. The process of tree counting should not be complicated; instead, division forest offices should be directly authorized to issue cutting orders based on approved IEs and EIAs.

How to Mobilize 80 Trillion Investment?

Studies show that to achieve the 30,000 megawatt target, a total investment of 75 to 80 trillion rupees is required, including 60 trillion for generation, 12 trillion for transmission lines, and 8 trillion for distribution infrastructure. Dulal stated that amendments to the Securities and Company Acts are essential to raise such a large capital.

"Small investors investing 5-10 lakh rupees in productive sectors using remittances from Nepalis living abroad should be included in promoter shares, and they should be provided with listing and trading facilities for their shares," he said. His demands also include allowing IPO issuance only after 60-70 percent of the project work is completed and removing the 'locking period' for small investors. Furthermore, he suggested that the source of income for investments made in hydropower for 10 years should not be investigated.

According to Dulal, the 70 ropani land ceiling under the Land Reform Act obstructs the construction of large projects and transmission lines, and a provision should be made where the land ceiling does not apply to land acquisition determined by IE and EIA.

Dulal said, "We are bound by international conventions, which are above Nepal's laws. However, by creating special laws for 10 years to remove these obstacles, international commitments will not be affected, and after 10 years, the old laws will automatically become active, allowing development to gain momentum."

A committee led by National Planning Commission member Arjun Jung Thapa is currently preparing a draft regarding this. According to Deputy Secretary-General Dulal, if the legal obstacles are not removed, the government's 30,000 megawatt target will remain confined to paper. - News Agency Nepal