The claim that private promoters have already invested more than 66 billion 22 million rupees has reached a state of sinking
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In the budget of the financial year 2082/83, it has been mentioned that the electricity purchase and sale agreement (PPA) of the run-of-river (ROR) hydropower project will be in accordance with take and pay. But the Independent Power Producers Association of Nepal (IPPAN) has complained that the way to build 17,000 megawatt projects has been blocked by such an announcement.
Ippan concluded that the government announced in the budget that the energy sector will be terminated, even though it is clear that banks and financial institutions will not manage the finances in PPAs based on take and pay. "This announcement has not only blocked the construction of around 300 projects of 17,000 megawatts, but the investment of more than 66 billion 22 million rupees, which has been invested by private promoters for these projects so far, has reached a state of sinking," IPPAN said in a statement issued on Saturday. IPPA President Ganesh Karki said that the announcement made in the budget has made the private sector, which has invested more than 15 billion in the hydropower sector, and has planned to invest more than 30 billion, completely pessimistic.
According to Ippan, when the country's power generation capacity reaches 3600 megawatts, the share of the private sector is more than 80 percent. According to IPPAN, the capacity of the ROR project that needs to be PPA by applying for construction and survey from the Electricity Development Department is only 17 thousand 117 MW, out of which the capacity of the project promoted by the Nepal Electricity Authority or the government is only 190 MW.
'We have taken it as a gross anti-government step towards the private sector of the government of Nepal, that the government has announced through the budget that after having invested more than 66 billion after giving a permit from the electricity development department,' the statement said, 'Even if the budget had only announced the opening of the door to the private sector for electricity business, we would have reached a situation where we would have found a market and made a PPA ourselves. But without doing that, this provision of the budget presented in the parliament which discourages the private sector, which is active in the construction of most of the ROR projects, has made the private sector pessimistic.'
IPPAN demands that the take and pay provisions which are anti-private sector and end the private sector in the energy sector should be immediately revised and create an environment for PPAs to be done on the basis of take or pay, which the Electricity Authority has been doing since before. Otherwise, Ippan warns that the private sector will fight against it. Rajan Dhakal, the spokesperson of Nepal Electricity Authority, said that even though it was included in the budget, the issue was not clear. "It has come in the budget, but it is not clear," he said, "Now the Ministry of Finance and the Ministry of Energy will clarify and send it."
