Nepal Electricity Authority (NEA) is signing power purchase agreements (PPAs) with hydropower projects for the production of around 1,500 MW hydroelectricity.

According to the NEA, it has moved forward to open the PPA on Run of the River (RoR) hydropower projects. The state-owned power utility has put on hold the PPA for a long time.

NEA Managing Director Kulman Ghising said the proposal to open the PPA is to be reviewed by the NEA board. According to him, the NEA’s next board meeting will make a decision on the issue.

Although the Cabinet meeting three months ago paved the way for the NEA to conduct PPA with the private sector hydropower producers, the authority has been dilly-dallying to materialize the government decision. The private sector has also been pressurizing the NEA to open the PPA of the hydroelectricity projects in the pipeline.

According to the NEA, the PPAs to be opened will allow the proposed projects to operate in the Q40 design. If the projects concerned wish to go into the Q25 design, they will be allowed to do so later on.

A hydropower project that can produce electricity in full capacity for 4.8 months is also known as Q40 project. Earlier, NEA had been considering removing the condition of Q40, in order to take all the projects to the Q25 model.

The government has set a target of producing 15,000 MW in the next one decade. This includes a 35 percent share, equivalent to 5,250 MW, of the RoR system.