The Association of Independent Power Producers, Nepal (IPPAN) has announced the first phase of protest after Finance Minister Bishnu Paudel was not positive about the removal of the provision related to 'Take and Pay' power purchase and sale agreement (PPA) made in the budget of the next financial year 2082/83.

Mohankumar Dangi, Acting President of IPPAN, said that until the budget and programs are passed by the House of Representatives, we will continue strong agitation until the key of hydropower projects are handed over to the government if the 'Take and Pay' PPA is not removed.

Ippan has announced a program of protest because the bank will not invest in PPA based on the 'take and pay' (take and pay) basis of the budget that has come to suppress the private sector, which accounts for more than 80 percent of Nepal's total electricity production. According to IPPAN, due to the arrangement of the budget, more than 66 billion investment in more than 350 projects of 17,000 megawatts being studied by the private sector will sink.

In item number 227 of the next financial year's budget, it is mentioned that PPA will be done on the basis of 'take and pay' for the Run of River project. In case of PPA in 'Take and Pay', the authority buys the quantity it needs and pays only for it. When doing PPA in 'Take or Pay', the authority has to buy electricity according to the agreement made with the promoter, otherwise it has to pay the price for it to the promoter.

Authority has been doing PPA only on 'Take or Pay' so far. Although the hydroelectric project can be built but the new transmission line is not completed or the capacity of the transmission line is reduced, the authority has set a time limit for PPAs made in the old 'take or pay' basis and pays for electricity on the basis of 'take and pay'.

Energy, Water Resources and Irrigation Minister Deepak Khadka is claiming to correct the 'take and pay' provision in the budget of the next financial year. But in the meeting of the House of Representatives last Monday (June 2), Finance Minister Poudel indicated that the provision will not be removed. He said that a law has been proposed in the House to enhance the role of the private sector in power generation, transmission and sales.

The proposed Electricity Bill 2081 to open up the private sector to produce and trade electricity is under consideration in the Parliament. After the bill is passed, the scope of electricity business will be widened. "After that, the situation of having to sell electricity only to the Electricity Authority will end," Finance Minister Paudel said. The private sector will be able to sell excess electricity. He said that the authority can enter into a PPA to supply the necessary electricity after looking at the current production and consumption. Finance Minister Paudel said that "take and pay" was proposed as this law was also under consideration.