The Energy Ministry has again formed another committee to bring policy to sign power purchase agreement (PPA) with foreign developers. The ministry has again formed a committee under Joint Secretary Sanjay Sharma 14 months after one formed under Joint Secretary Keshav Dhwaj Adhikari could not complete work in time. The committee also includes representatives from finance and law ministries and the Nepal Rastra Bank (NRB).
Energy Secretary Rajendra Kishore Chhetri said it is continuity of the past committee. “The consultant has already submitted its report and work will move forward in a way to complete policy by mid-September. It has taken time as PPA in dollar is a big issue,” he added. The sub-committee under the Public Accounts Committee (PAC) of the parliament also has yet to submit its report on dollar PPA. PPA to be signed for projects with foreign investment is uncertain due to delay in the policy. Work of half a dozen big projects being constructed with foreign investment has been stopped in lack of the policy. Banks and financial institutions do not invest on projects until PPA is signed.
The PAC in June 2014 had formed the sub-committee to prepare policy for dollar PPA under lawmaker Top Bahadur Rayamajhi after that signed with around half a dozen projects invited controversy in the past. But the sub-committee has yet to prepare the report while the Nepal Electricity Authority (NEA) management also does not want to sign PPA until the policy for dollar PPA is prepared. The NEA has not signed dollar PPA after controversy of that signed for Khimti (60 MW) and Bhotekoshi (36 MW) projects. The NEA has also signed dollar PPA with Upper Marsyangdi-1 (50 MW) and Lower Solu (82 MW).
The NEA has already prepared policy to sign PPA at a single rate for projects up to100 MW, and one with projects up to 100 MW is being signed accordingly. PPA for projects up to 100 MW is signed in Nepali currency and that for bigger projects is signed after mutual negotiation between the promoters and NEA.
Pressure of World Bank
The World Bank is putting pressure to sign PPA with promoter of Upper Trishuli-1, Nepal Water and Energy, in dollar. Joint Secretary Sharma has received pressure from the World Bank headquarters a day after the ministry formed the committee to formulate policy for dollar PPA. Stating that the license in name of Nepal Water will expire in a month, the World Bank has asked to sign PPA and project development agreement (PDA) before that. The International Finance Corporation (IFC) under the World Bank will invest in the 226 MW project. The cost of project has been raised to Rs 280 million per MW. Its estimated cost is Rs 60 billion.
Source : Karobar Daily