Government Announces Immediate Power Purchase Agreements for Projects Under 10MW

Kathmandu. The government has announced immediate PPAs for electricity projects with a capacity of less than 10 megawatts. 

Finance Minister Dr. Swarnim Wagle made this announcement while presenting the budget for the fiscal year 2083/84 in Parliament. 

Finance Minister Wagle said, 'The government will divide the Nepal Electricity Authority into three separate companies for production, distribution, and trade. We will cancel the licenses of projects that have signed power purchase agreements but have not yet produced electricity and promote new PPAs under the take-or-pay method. We will immediately conduct PPAs for electricity projects with a capacity of less than 10 megawatts. We will arrange to determine the electricity purchase rate on a fluctuating basis during the dry season and sign purchase agreements.' 

He also announced arrangements for the private sector to trade electricity in the international market. He stated that legal arrangements will be made for trading electricity by building transmission lines and charging wheeling charges. 

He said, 'We will arrange for the adjustment of forest land use rights and tree cutting fees when the ownership of hydropower projects is transferred to the Nepal government after the concession period. To encourage the private sector to increase investment in reservoir-based projects, we will arrange to sell 40 percent of the shares to the general public in the first year.'