Kathmandu — The Independent Power Producers’ Association, Nepal (IPPAN) has welcomed the new government’s 100-point governance reform action plan, stating that it supports overall development of the energy sector and strengthens private sector participation. The association has expressed hope for its full and effective implementation.
IPPAN, an umbrella organization of energy entrepreneurs, has been working to identify challenges in the energy sector and coordinate with relevant authorities to find solutions. Currently, more than 570 power producer companies are affiliated with IPPAN, reflecting the growing role of the private sector in Nepal’s energy industry.
Nepal’s total electricity generation capacity has now exceeded approximately 4,000 megawatts. Of this, projects developed by the private sector contribute more than 3,350 megawatts. In addition, projects with a capacity of around 5,700 megawatts are currently under construction by private developers.
Similarly, projects with a capacity of about 13,000 megawatts have already applied for Power Purchase Agreements (PPAs), while projects totaling around 15,000 megawatts are in the feasibility study phase. So far, the private sector has invested over NPR 1.31 trillion in completed, under-construction, and planned projects. IPPAN stated that the private sector is preparing to invest an additional NPR 3 trillion over the next 10 years.
The newly formed government has set an ambitious target of generating 30,000 megawatts of electricity within the next decade. According to IPPAN, this goal has boosted confidence among private investors. The 100-point action plan unveiled immediately after the government formation clearly identifies the energy sector as a key driver of the country’s economic transformation.
In particular, the government’s announcement to reopen the Power Purchase Agreement (PPA) process within a maximum of 180 days—after being stalled since 2018 due to various reasons—has been seen as a significant step for the energy sector. It is expected that projects with a total capacity of around 13,000 megawatts that have already applied for PPAs will move forward within the next six months, paving the way for other projects as well.
IPPAN has long been advocating for private sector participation not only in power generation but also in transmission, distribution, and electricity export. Due to the current lack of private sector involvement, several challenges have emerged in transmission line construction, distribution system expansion, and power trade. IPPAN has welcomed the action plan’s indication of increased private sector participation in these areas.
According to the action plan, an energy export strategy will be prepared within one month, which is expected to facilitate the expansion of cross-border electricity trade. The plan also includes developing and implementing a roadmap for structural reforms of the Nepal Electricity Authority, strengthening industrial and commercial security infrastructure within 30 days, and establishing a multi-dimensional financing framework that includes government, private, foreign, and diaspora investments to ensure long-term financial resources for the energy sector.
IPPAN has expressed confidence that these reforms will play a crucial role in addressing structural and financial challenges in the energy sector.
Likewise, IPPAN has highlighted the implementation of a one-door policy as an important reform to eliminate long-standing procedural hurdles faced by investors. This system is expected to reduce delays in processes such as land acquisition, tree cutting, and environmental impact assessments, thereby creating a more investor-friendly environment.
Emphasizing that effective implementation of the action plan is the most critical factor, IPPAN has expressed confidence that the Ministry of Energy, Water Resources and Irrigation will move forward seriously in this regard. It also stressed the need for continuous dialogue and collaboration with the private sector during implementation.
IPPAN has reiterated its readiness to fully cooperate and coordinate with the government in implementing commitments and action plans related to the energy sector.
Urajasanchar