IPPAN Celebrates 24th Anniversary, Highlights Achievements and Challenges in Nepal’s Hydropower Sector

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Deputy Prime Minister Shrestha and Energy Minister Basnet address challenges and future vision Focus on energy security, domestic consumption, and private sector investment

Kathmandu. Independent Power Producers Association, Nepal (IPPAN) has completed its 24th year of establishment. Established in 2001 as an umbrella organization of private energy producers, IPPAN has entered its 25th year.

IPPAN celebrated its 24th anniversary (IPPAN Day) on Thursday with a special program in the capital. Deputy Prime Minister and Home Minister Narayankaji Shrestha while addressing the opening session of the anniversary program said that the contribution of the hydropower sector is also important for the prosperous development of the country. He said that although the current economy is remittance-oriented, it can be made productive in the future by increasing hydropower production.

“In the last few years, the increase in hydropower production is making the country self-sufficient in energy,” he said. He said that now is the time to focus on the development of the tourism sector.

He said that the production of hydroelectric power should be increased not only for the purpose of export but also for the purpose of increasing domestic consumption. Stating that the economy will be strengthened by increasing the quantity of electricity consumed within the country, Shrestha said that the government will work according to the strategy of exporting only excess electricity to neighboring countries.

He said that investment will be promoted for the development of the hydropower sector in the investment conference that the government is planning to hold in Baisakh next month. Deputy Prime Minister Shrestha said that energy producers are not only doing business but also making important contributions to the development of the country.

He also urged that if the concept of green development can be adopted, the country will go on the path of development. Shrestha also promised not to allow any shortfall in security for energy entrepreneurs. “Independent energy entrepreneurs invest confidently, without worrying about security. The government will guarantee the safety of hydropower investors, he said.

Addressing the program, Energy Water Resources and Irrigation Minister Shakti Bahadur Basnet said that it is a matter of pride that the private sector’s share in total energy production has reached 70 percent. He claimed that it would be possible to meet the target of 28,000 megawatts of electricity production in 12 years as there has been great success in energy production in the last decade and now the investment environment is becoming easy.

He announced that the government will assist by removing policy obstacles for the ease of investment in the private sector. Stating that the installed capacity in the transmission system has reached 2900 megawatts due to the success achieved in the last decade, Minister Basnet claimed that an additional 500 megawatts will be added to the power system by the end of the current financial year.

Likewise, IPPAN President Ganesh Karki said that he is more excited for private sector investment due to the achievements of the Prime Minister’s visit to India. He said that the recent agreement to export 10,000 megawatts of electricity to the Indian market in the next 10 years is a great achievement for the hydropower sector, and Karki demanded to open the power purchase agreement (PPA) of all the hydropower projects that are now waiting for their turn.

“Now the country has become energetic” he said, “The government should declare the next decade as the energy decade and encourage the private sector to invest.” By doing this, we can succeed in the direction of exporting 10,000 megawatts of electricity in 10 years.

He said that now the government has increased the equipment VAT of the hydropower project and President Karki demanded the government to maintain the previous rate. “Regarding the reduction of VAT in the energy sector, IPPAN has suggested that the Ministry of Finance take a proposal to the Council of Ministers to solve this problem,” he said. “We are confident that this problem will be solved by the Ministry.”

President Karki said that 31 hydropower projects had been damaged due to the floods and landslides of the last monsoon and asked to solve the problems of those projects. He reminded that an investment of 46 trillion rupees will be required to produce 10,000 megawatts of electricity and asked Nepal Rashtra Bank to pay attention to it.

President Karki said that the Nepalese who are abroad invest in real estate after returning to Nepal and urged the government to make arrangements to bring that investment into hydropower projects.

He emphasized that construction of high-capacity transmission lines should be prioritized to avoid wasting the hydropower invested by the private sector. “Currently, the main problem to connect the private sector’s hydropower plants to the electricity system is that the transmission line is not built on time,” he said.

He lamented that the loan investor bank blacklisted energy entrepreneurs due to the loss of power during the drought. Karki asked the Home Minister to pay attention to the security of energy entrepreneurs saying that private investment hydropower projects are vandalized from time to time, donations are terrorized, and when they don’t pick up the phone, they come to their houses to ask for donations and terrorize them.

Stating that the bank’s investment in the 3600 megawatt capacity hydropower project that has been completed now, Karki drew the attention of all parties to solve this problem.

Karki said that the energy entrepreneurs who are building hydropower projects worth billions of investment, earning foreign currency by exporting electricity, and leading the country on the path of economic prosperity are also facing problems in entering the Singha Darbar and requested the Home Minister to make arrangements for entry after showing the IPPAN card.