Kathmandu: Independent Power Producers’ Association, Nepal (IPPAN) Senior Vice President Mohan Kumar Dangi has pledged to make IPPAN’s upcoming tenure a “golden era.” Dangi, who has been contributing to Nepal’s energy sector for the past 20 years, is preparing to take on the organization’s next leadership role.
He stated that the private sector must move forward with a decisive role in developing Nepal’s energy sector as a key foundation for transforming the national economy.
According to him, the energy sector is no longer just an issue of infrastructure development but has become central to Nepal’s economic transformation. Although hydropower, solar energy, and electricity trade have shown encouraging potential in recent years, structural problems still persist at the implementation level.
Dangi said that while the government has set an ambitious target of generating 30,000 MW of electricity within the next 10 years, extensive legal, administrative, and policy reforms are essential to translate the target into reality. The government recently revised its earlier target of 28,500 MW by adding another 1,500 MW.
Recalling that the private sector has remained active in the energy sector for more than two decades, Dangi said private investment began after power purchase agreement (PPA) rates were fixed in 1998/99. Since then, while some projects have succeeded, many others have stalled during study or initial phases due mainly to policy instability and legal complexities.
He noted that Nepal’s energy sector is still being governed under the 32-year-old Electricity Act 1992, and Electricity Regulations 1993, adding that the outdated legal framework can no longer support a modern energy market.
According to him, efforts to introduce a new Electricity Act have continued since 2001/02, but political instability, frequent changes in government, and dissolution of Parliament have prevented success. He stressed the need to introduce a new and progressive Electricity Act 2026/27, to modernize the sector.
Dangi identified forest and environmental policies as another major challenge for energy development. He said the land acquisition process for development projects in Nepal remains extremely complicated, and the inability to maintain a balance between environmental protection and infrastructure development has delayed many projects. He pledged to prioritize these issues during his tenure.
According to the data he presented, Nepal had around 31 percent forest coverage in 1972/73, while government forests alone now account for nearly 47 percent. Including community and private forests, the share rises to around 53 percent, and when Himalayan and protected areas are included, nearly 68 percent of Nepal’s land falls under some form of conservation area.
In such a situation, he said, energy projects, roads, transmission lines, and industries are required to obtain approvals from multiple agencies to acquire land. He therefore called for the implementation of a “one-door policy” and a “sunset law.”
Speaking about administrative hurdles, Dangi said even a normal energy project must coordinate with as many as 14 ministries and 24 departments before moving ahead. Such a system, he argued, increases not only delays but also project costs significantly.
He further said land management and ceiling policies have also created problems for energy infrastructure development. According to him, the policy limiting private companies to a maximum of 75 ropanis of land has negatively affected large hydropower and energy projects.
Dangi stated that Nepal’s current electricity generation capacity has reached around 4,100 MW, while domestic demand stands at about 2,200 MW. Around 1,200 MW is currently being exported to India, yet 500–700 MW of electricity is still going to waste.
He added that the government’s tendency to issue licenses without signing PPAs has left private sector projects totaling around 16,100 MW in uncertainty. According to him, the public has already invested nearly Rs 200 billion in those projects.
Highlighting the private sector’s contribution, Dangi said Nepal’s total installed capacity stood at only 294 MW in 1998/99, but the private sector alone has added nearly 3,500 MW over the past 26–27 years.
He argued that since the Nepal Electricity Authority cannot shoulder the entire burden alone, the private sector should also be allowed to engage in electricity trade and transmission line construction.
Dangi said consuming electricity domestically would be far more beneficial to Nepal’s economy than selling power to India at around Rs 8.67 per unit. He stressed the need to boost internal consumption through electric vehicles, data centers, and industries based on new technologies.
He also noted that although the provision requiring local residents to receive 10 percent shares in energy projects is positive, many projects have been unable to issue shares due to a lack of approval from the Securities Board. This, he warned, has created disputes at the local level and affected project implementation.
Dangi argued that instead of cracking down on entrepreneurs, the government should impose strict penalties on wrongdoers while ensuring effective regulation and creating an investment-friendly environment.
Referring to the fuel crisis period, he said electric vehicles had already demonstrated the importance of energy self-reliance. He emphasized that the next priorities should be expanding transmission lines, allowing private sector participation in electricity trade, and increasing domestic consumption.
He said these issues would be strongly raised during IPPAN’s general assembly scheduled for June 12, 2026. Taking Nepal’s political and economic situation into account, Dangi stated that the private sector is ready to lead the country’s energy sector into a “golden era,” while urging the government to play a facilitating and supportive role.
Urjasanchar
