Power producers press for PPA with ‘super-six’ projects

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    NEA_BuldingKATHMANDU, March 23:Independent power producers have urged the government to direct the Nepal Electricity Authority (NEA) to immediately ink power purchase agreement (PPA) with “super-six” hydropower projects.

    Submitting a memorandum to Energy Minister Uma Kant Jha, independent power producers have requested the government to issue strong directives to NEA to expedite the “super-six” projects.

    The six projects — 16 megawatts Singiti, 24.1 megawatts Khare, 23.5 megawatts Upper Solu, 82 megawatts Lower Solu, 14.9 megawatts Maya Khola and 50 megawatts Mewa — are awaiting PPA with NEA though they are all set to kick off construction.

    “The projects that have paid premium money to the government shouldn´t be kept in limbo,” reads the memorandum submitted to the minister. “We are deeply concerned over the development of these projects.”

    The NEA is dilly-dallying to sign PPA though the projects were awarded through competitive bidding process for the first time. Before that, the hydropower projects were awarded to developers on first-come-first-serve basis. The government had even pledged to develop transmission lines while awarding these projects to the developers.

    Officials of Independent Power Producers´ Association, Nepal (IPPAN) had met minister Jha at the latter´s office in Singha Durbar on Friday and submitted a 10-point memorandum demanding that the government´s decision to hike license fees be scrapped. “The government´s decision to increase survey license fee has had a negative effect on the hydropower sector,” reads the memorandum. “We request government to scrap that decision.” The government had increased survey license fee in October 2012 through a notice in the gazette.

    “The hike in license fee has discouraged hydropower developers,” states the memorandum. “The government should take other measures to ensure timely completion of projects instead of increasing the license fee.”

    The independent power producers have also stressed on expediting project development agreement (PDA), power negotiation agreement (PNA), PPA for hydropower projects above 25 megawatts, revision in PPA rate, and VAT exemption on civil construction materials, among others.

    Similarly, power producers have urged the government to be serious about developing transmission lines. “Development of transmission lines is a need of the hour,” reads the memorandum. “Lack of transmission lines is one of the major bottlenecks for hydropower development in the country.

    ” Further, the power producers have also asked government to establish a power trading corporation as early as possible in order to address the issue of transmission lines in the country.

    Source : Republica