IPPAN and FMO Discuss Bringing in International Investment into Nepal’s Energy Sector


The Independent Power Producers’ Association, Nepal (IPPAN) and FMO – a Dutch entrepreneurial development bank – have discussed bringing in international investment into Nepal’s energy sector.

In a discussion with representatives of FMO here today, IPPAN said that investment of billions of dollars in Nepal’s energy sector is needed and asked for long-term loans at cheap rates.

IPPAN President Ganesh Karki informed that the government cancelled the power purchase agreements (PPAs) of 2,600 megawatt hydropower projects for failing to manage the necessary funds and said that there is an immense investment opportunity in Nepal’s energy sector.

Naresh Shrestha / THT “The government has recently taken a strategy to produce 35,000 megawatts of electricity in 12 years. Nepali banks cannot manage to finance all these projects,” Karki said.

The Chief Executive Officer (CEO) of FMO, Michael Jongeneel, said that if hydropower promoters in Nepal work by keeping environment, society and governance (ESG) aspects at the centre, FMO wants to bring in large investments to Nepal.

Ashish Garg, vice-president of IPPAN, while presenting the statistics of Nepal’s hydropower production and use, said that investment worth $113 billion would be needed in 1,224 projects with capacity of 53,431 megawatts during various stages of project development.

Presenting statistics on hydropower projects, he mentioned that Nepal still requires an additional $95 billion for financing these projects.

“To date, we have invested $5 billion in 191 completed projects with a total installed capacity of 2,900 megawatts.

Furthermore, we financed $11 billion for 129 projects currently under construction, with a combined capacity of 7,107 megawatts.

Among them, surplus power generates by six projects with a capacity of 4,215 megawatts will be exported abroad.”

Meanwhile, IPPAN Vice-President Uttam Blon Lama emphasised that FMO, either by itself or in collaboration with other international banks and financial institutions, should lead investments in Nepal’s energy sector by providing long term loans at low interest rates through Nepal’s banks or directly.

Source: Himalyan Times