NEA showed partiality in incentive distribution: Power developers

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    KATHMANDU, July 22 :

    NEA_BuldingPower developers have accused Nepal Electricity Authority (NEA) of unfair treatment while providing incentives to some 23 ´sick´ hydropower projects.

    Though seven power producers have already received incentives, which include increment in power purchase agreement (PPA) rate for seven years and one-year concession time for project that are supposed to start generation by mid-April 2015, other 17 projects have been kept waiting.

    The incentives are part of the load-shedding minimization plan introduced by the government on April 16 last year. After the government introduced the plan, the Ministry of Energy screened all 23 ´sick´ projects and forwarded the list to the NEA.

    According to officials at the energy ministry, these sick hydropower projects have combined capacity of 240 MW.
    A high-level official at the energy ministry said NEA has taken a whimsical decision on the issue. “It has delayed incentives for 16 hydropower projects without giving specific reason,” the official added.

    Meanwhile, a high-level official of NEA said they provided incentives to seven projects as per the cabinet decision. “Another 13 projects are under consideration at the NEA Board,” the source said, adding that he has no idea about the other three projects.

    The source further added that they provided subsidy to seven projects on first-come-first-serve basis.
    Rameshwar Yadav, managing director of NEA, couldn´t be reached for comments despite repeated attempts.

    Meanwhile, Gyanendra Lal Pradhan, executive member of Independent Power Producers´ Association, said NEA was not abiding by the cabinet decision. “It has adopted discriminatory approach,” he added.

    Pradhan´s project, Charnawati Khola (3.5 MW), is among the 16 projects waiting for the incentives. Uper Madi (20 MW) and Sipring Khola (10 MW) are also among the 16 projects.

    In a bid to bail the sick projects out of the crisis, the government had also announced concession loan of Rs 20 million per mega watt to them. As per the decision, the finance ministry was supposed to arrange loans to sick projects through government-owned financial institutions.
    The seven projects that have received government incentives are Jiri Khola (2.4 MW), Chaku (4.8 MW), Middle Chaku Kola (1.8 MW), Ankhu Khola-1 (7MW), Lower Modi-1 (10 MW), Lower Indrawati (4.5 MW) and Bijayapur-1 (4.5 MW).

    Kumar Pandey, the promoter of Lower Indrawati, said the incentive has breathed new life on the project. “We failed to continue the project after the project costs and bank interest increased. Now that we have got the incentives, we are confident about completing the project on time,” he added.

    Source : Republica