Investment proposals worth Rs 1.7 trillion await approval for Nepal hydropower development

Ministry of Energy, Water Resources and Irrigation
Ministry of Energy, Water Resources and Irrigation

Kathmandu, November 17

Owing to an unfavourable policy, investment proposals worth Rs 1.7 trillion are awaiting approval for hydropower development in Nepal for the past three years.

It has been three years since the government last approved any investment proposal floated by a private company in the country. Stakeholders including the Nepal Electricity Authority warn the stalemate is likely to have an adverse impact on the demand-supply balance and the potential international market of the hydropower sector.

The Ministry of Energy, Water Resources and Irrigation says the allocated quota for power purchase agreements (PPA) has been already over as per the ‘take or pay’ scheme for run-of-the-river projects.

“We have invested over Rs 10 trillion in hydropower so far,” Krishna Prasad Acharya, the president of Independent Power Producers’ Association Nepal, says, “We are ready to invest Rs 17 trillion more. But, the government should make a conducive environment for that.”

Instead of expanding the quota, the ministry now wants to introduce new models for the PPA so as to promote as much competition as possible. Previously, all PPAs used to be signed at the same rate, but now the government wants to change that.

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