Kathmandu: The Independent Power Producers’ Association of Nepal (IPPAN) marked its 26th anniversary with a major event attended by national leaders, who praised the private sector for its pivotal role in transforming Nepal’s energy sector. The program highlighted Nepal’s achievements in energy production, emphasized the importance of policy reforms, and stressed the need to increase domestic electricity consumption.
Vice President: IPPAN Key to Energy Self-Reliance and National Development
Vice President Ram Sahay Prasad Yadav lauded IPPAN’s contribution over the past two decades, calling it a cornerstone of national development and economic prosperity. He emphasized that Nepal’s rich hydropower and renewable energy resources must be fully utilized to reduce dependence on energy imports. He stated that energy self-reliance is directly linked to economic independence and national security, and that sustainable development is not possible without adequate energy supply.
Vice President Yadav added that affordable and reliable energy would accelerate growth in industry, agriculture, tourism, and IT, creating jobs and enhancing prosperity. He also emphasized that expanding renewable energy would reduce carbon emissions, protect the environment, and help Nepal face climate change challenges. He urged the government and private sector to prioritize quality, transparency, and accountability, and called for modern technology, research, and innovation. He further stressed that communities affected by energy projects should benefit and that long-term strategies are needed for generation, distribution, storage, and export.
Energy Minister: Private Sector Ends Load-Shedding, Nepal Now Ready to Export
Addressing the ceremony, Energy Minister Anil Kumar Sinha stated that Nepal has become load-shedding free thanks to active private sector participation. He highlighted that Nepal’s total electricity generation has reached around 4,000 MW, with more than 3,300 MW contributed by the private sector.
He noted that the private sector’s journey began with small projects of 5–10 MW, which have now grown to projects larger than 100 MW. Minister Sinha announced the government’s ambitious target to produce 28,500 MW within the next ten years and revealed that Nepal has already signed an agreement to export 10,000 MW to India. Export plans with Bangladesh are also underway.
However, he acknowledged major challenges, including legal reforms, Power Purchase Agreements (PPAs), expansion of transmission lines, and difficulties in obtaining land and forest permits. He called for policy clarity in ‘Take and Pay’ and ‘Take or Pay’ frameworks and urged simplification of environmental assessment procedures. He also stressed the need for private sector investment in research, legal expertise, and human resource development, and encouraged voters to elect development-friendly representatives in upcoming elections.
Industry Leaders: Domestic Consumption Must Rise, Policy Reforms Needed
CNI Chairman Dipak Malhotra urged the government to increase domestic electricity consumption through policy initiatives. He said that although electricity supply is increasing rapidly, Nepal has not focused enough on domestic use beyond export. He stressed that industries, transportation, and other sectors must increase power usage to drive economic growth.
Malhotra noted that the industrial sector’s contribution to GDP has fallen from 9% in 1996 to less than 5% today, despite consuming more than 35% of total electricity. He said achieving the 2035 target of 28,500 MW will require huge investments, including foreign capital, and called for strong public–private partnership (PPP) models.
CNI Chairman Birendra Raj Pandey highlighted the lengthy and complex process of hydropower development, saying it takes 10–12 years from survey license to PPA and construction due to bureaucratic hurdles. He pointed out that investors must approach 16 different ministries for a single project and called for immediate implementation of a single window system. Pandey added that hydropower has become the most attractive and safest investment sector in Nepal.
IPPAN’s Growth, Investments, and Ongoing Challenges
IPPAN Chairman Ganesh Karki said that more than 900 hydropower projects have obtained licenses and are progressing. Projects totaling 11,600 MW are at various stages of development, while 16,000 MW of PPAs have been signed. Of this, 4,000 MW is already connected to the national grid and 5,000 MW is under construction.
Karki revealed that 11.3 million Nepalis have invested directly or indirectly in the hydropower sector, with total investment reaching NPR 131 billion. He criticized the “Take and Pay” policy and highlighted issues such as transmission line shortages and cumbersome EIA/IEE processes.
New Reports and Awards Announced
On the occasion, IPPAN released two major reports: “Energy Prosperity” and “Study on Investment of Hydropower Sector.” The association also introduced the IPPAN Journal Award, presented this year to Milan Bishwakarma of Naya Patrika and Seema Tamang of Kantipur Daily.
Research by IPPAN and BFIS News showed that the private sector has invested NPR 131 billion, while the government has invested over NPR 101 billion. Banking sector investment in hydropower projects amounts to NPR 87 billion, and private equity investment is NPR 40.3 billion.