Energy ministry to conduct study of stalled hydropower projects

KATHMANDU: Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha has said his ministry will study hydropower projects that hold licences but have not commenced construction.

Minister Shrestha made the remark at a meeting with newly elected office-bearers of the Independent Power Producers' Association, Nepal (IPPAN) on Monday. He said projects would be categorised according to their progress and action taken accordingly. He pledged the government’s full support for genuine investors but warned that the practice of delaying construction after receiving a licence would be strongly discouraged and urged IPPAN not to encourage sluggishness.

The minister said issues in the energy sector would be prioritised rather than dealt with through a blanket approach, and that policy-level anomalies must end immediately with a new Act, regulations and directives in place. He said the government intends to expand the role of the private sector in power trade, noting the private sector’s importance in market management, rising energy consumption, transmission and distribution as well as generation.

The Energy Minister said the concept of an 'energy mix' could form part of future planning in response to climate change’s impact on modes of energy production. A proposal to appoint an energy attaché at the Nepali Embassy in India was advanced to help expand power trade, and Shrestha said the government was actively pursuing energy diplomacy. He also expressed readiness to establish a high-level mechanism with private-sector collaboration to tackle policy and implementation problems in the sector.

IPPAN handed the ministry a 38-point list of suggestions aimed at resolving policy and structural obstacles to energy development in Nepal. The proposals included granting licences to the private sector for power production, construction of common transmission lines, an investment-friendly Energy Act, extension of licence validity, promotion of green energy, improvements to power purchase agreements (PPA), and simplification of environmental permitting.

IPPAN chairman Mohan Dangi said the sector could generate 30,000 MW of electricity within the next ten years if the government ensured policy facilitation. He raised concerns about delays in PPAs and the cancellation of permits, and urged the formation of a high-level mechanism to resolve the sector’s problems. “Financial closure is impossible unless PPA is ensured,” Dangi said, warning that licence cancellations would harm the investment climate.

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