IPPAN urges energy minister to scrap licence fee hike


    ippanKATHMANDU: Independent Power Producers’ Association of Nepal (IPPAN) and hydropower developers today urged Energy Minister Umakanta Jha to roll back the hike in licence fees for power developers saying it has discouraged the genuine developers.

    The government had increased by up to 600 per cent survey and generation licence fees in October last year.

    Stating that they hadn’t received any new application for the survey licence after the fee increment, IPPAN President Subarna Das Shrestha said, “The government should monitor each indicator of the terms of the survey licence rather than discouraging investors through the policy of revenue collection.

    The revenue collection should not get precedence over the development of power projects, he added.

    The government had increased the licence fees to discourage the trend of ‘occupying the rivers’, however the decision has met with damaging repercussions — over two dozen projects with total capacity of 800 MW have been scrapped in the last four months.

    IPPAN also took exception to the policy of denial to sign Power Purchase Agreement (PPA) by the Nepal Electricity Authority for the super six projects which were awarded after open bidding in 2010.

    One IPPAN member questioned the dual role of the government agency saying NEA had refused to sign PPAs with projects awarded by the Department of Electricity Development (DoED) for further development.

    Singiti (16 MW), Khare (24.1 MW), Upper Solu (23.5 MW), Lower Solu (82 MW), Maya Khola (14.9 MW) and Mewa (50 MW) are the super six projects with total capacity of 210 MW. However, these projects, which were expected to complete by 2015 end, are hanging in the balance after the NEA’s reluctance to sign the PPA.

    The IPPAN further demanded the cancellation of five per cent environmental service fees imposed by the Ministry of Forest on the income of the hydropower.

    IPPAN member Gyanendra Lal Pradhan urged the government to support hydro developers saying there is no benefit in the investment of hydro sector.

    Shashi Sagar Rajbhandari, one of the developers of super six projects, said after investing three years in studying and completing all the due process for the PPA, they have neither the PPA nor the generation licence.

    The government had awarded six projects with conditions of paying postdate rate, timely construction of the transmission line, and completing the feasibility study in 2010, but the government agencies are found to be reluctant to sign the PPA.

    Meanwhile, Minister Jha said the country needs to focus on small-size projects rather than mega projects to meet the current demand for power.

    On other various issues raised by the IPPAN, he said they need to sit for talks regarding the issue of licence fees, among others.

    Source : The Himalayan Times


    IPPs to govt: Revoke decision to increase survey licence fees


    Independent power producers on Friday asked the government to revoke its earlier decision of increasing the survey licence fee.

    During a meeting with newly appointed Energy Minister Umakant Jha, the Independent Power Producers’ Association, Nepal (IPPAN) requested for the scrapping of the decision stating that it was detrimental to the development of the hydropower sector in the country.

    The private sector developers have been criticising the government’s decision to increase the survey licence fee for hydropower projects of all capacity.

    On October 1, 2012, the Department of Electricity Development (DoED) had introduced a new licence fees by publishing the decision in Nepal Gazette. The decision was made with a view to discourage the prevailing trend of holding license but without intention to develop the projects.

    As per the revised rate, a survey licence for hydropower projects with a production capacity between 1 MW and 5 MW will has has been fixed at Rs 1 million, Rs 2 million for projects with 5 MW to 10 MW, and Rs 3 million for 10 MW to 25 MW projects.

    As regards the larger projects, those with proposed generating capacity between 25 MW to 100 MW of electricity will have to pay Rs 4 million rupees in license fee. Projects with capacity of more than 100 MW upto 500 MW will have to pay Rs 5 million, while for those above 500 MW will have to pay Rs 6 million.

    “The increment in the licence fee has troubled the developers,” said Gyandendra Lal Pradhan, member of IPPAN.

    During the meeting, the developers also asked the minister to revise the power purchase agreement (PPA) rate, suggesting an annual five percent hike on the exiting one. According to Pradhan, while making a presentation on the existing problems in the energy sector, they also proposed the government begin exploring external markets to fully utilise Nepal’s hydropower potential. The IPPAN officials also submitted a memorandum to the minister regarding their problems to the newly formed government. Minister Jha has called the developers on Wednesday for further discussion upon the matter.

    Source : The Kathmandu Post