Kathmandu, Nepal – The Independent Power Producers’ Association, Nepal (IPPAN), has strongly criticized the government for its failure to address the pressing needs of hydropower projects affected by recent floods. Chaired by Ganesh Karki, IPPAN has urged the Ministry of Energy, Water Resources, and Irrigation to either fulfill the demands of these projects or acknowledge their inability to do so.
During a meeting with the ministry, Karki expressed frustration over the government’s lack of action, accusing them of making empty promises that have exacerbated the situation for flood-affected projects. Despite providing evidence of the damage, including photos and videos, the affected parties have received little to no support.
One of the major challenges facing these projects is the removal of customs exemptions on maintenance equipment by the Ministry of Finance. This has significantly increased the costs for flood-affected projects, making it difficult for them to remain financially viable.
Karki also criticized the Ministry of Energy for ignoring repeated appeals regarding pressing issues in the energy sector. Delays in receiving necessary materials and approvals have caused significant setbacks for the projects, leading to steep financial penalties.
The Nepal Electricity Authority’s “Take and Pay” clause has further discouraged banks from investing in hydropower projects. This clause stipulates that the NEA will only pay for electricity once it is generated, putting developers at risk of bankruptcy if they fail to meet production deadlines.
IPPAN has outlined several demands to ensure the sustainability of Nepal’s energy sector. These include the resumption of Power Purchase Agreements (PPAs) for nearly 13,000 megawatts of hydropower projects, the elimination of penalties related to hydrological challenges caused by climate change, and the resolution of land and forest issues that have hindered project development.
In response, Energy Minister Deepak Khadka acknowledged the challenges faced by the hydropower sector but emphasized the government’s commitment to addressing these issues. He noted that the Electricity Bill is still under review to incorporate the concerns of the private sector.
While the government has made progress in terms of energy exports, the removal of customs exemptions and other bureaucratic hurdles continue to hinder the development of domestic hydropower projects. It remains to be seen whether the government will take decisive action to support these critical projects and ensure a sustainable energy future for Nepal.
