Energy Minister to Study Hydropower Projects with No Progress

Kathmandu. Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha has stated that a study will be conducted on hydropower projects that have not made progress for a long time despite obtaining permits, and necessary decisions will be made based on their classification.

Speaking at a program organized here today to welcome the newly elected executive committee of the Independent Power Producers' Association Nepal (IPPAN), Minister Shrestha said that the government will fully support genuine investors, while making it clear that the tendency of not advancing projects after obtaining permits must be discouraged.

He mentioned that the practice of any promoter holding a license (permit) is unacceptable and urged IPPAN not to protect such activities. Minister Shrestha stated that to solve the problems in the energy sector, all issues should not be treated the same but should be classified and advanced based on priority. He emphasized the need to end policy uncertainty by bringing in the necessary regulations and directives along with the Electricity Act.

Minister Shrestha mentioned that preparations are underway to expand private sector participation in electricity trade, and pointed out the need to increase the role of the private sector not only in production but also in market management, increasing electricity consumption, and transmission and distribution systems.

Minister Shrestha believes that as the nature of energy production is changing due to climate change, future energy plans should be based on the concept of energy mix. He informed that a proposal to appoint an energy attaché at the Nepali Embassy in India to expand electricity exports is being moved forward, and stated that the government is active in strengthening energy diplomacy.

Minister Shrestha said that he is positive about forming a high-level mechanism in collaboration with the private sector to solve the policy and implementation problems seen in the energy sector. He mentioned that the energy sector should be linked to the country's economic transformation and advanced from an 'economic engineering' perspective, and that regular dialogue and cooperation will be held between the government and the private sector.

At the program, IPPAN submitted a 38-point suggestion to the Ministry of Energy for solving the policy and structural problems seen in energy development. The association has provided suggestions covering issues such as granting permits for electricity trade to the private sector, participation in transmission line construction, making the Electricity Act investment-friendly, constructing common transmission lines, extending the permit period, improving the Power Purchase Agreement (PPA) system, increasing electricity consumption, promoting green energy, and simplifying the environmental approval process.

IPPAN Chairman Mohan Dangi claimed that the national goal of producing 30,000 megawatts of electricity within the next 10 years solely by the private sector can be achieved if the government provides policy facilitation. He stated that delays in PPAs, lack of transmission infrastructure, the provision of not extending the Commercial Operation Date (COD), and the practice of canceling permits have created uncertainty among investors, and urged the government to solve the problems through a high-level mechanism.

Chairman Dangi mentioned that financial closure is not possible without a PPA, and the practice of canceling permits based on that affects the investment environment. He clarified that IPPAN itself is committed to discouraging the practice of issuing Initial Public Offerings (IPOs) and rights shares without starting production.