Nepal Electricity Authority (NEA) has decided to open the power purchase agreement (PPA) for 5,000 MW hydroelectric projects.

The NEA had put on hold the PPA of the hydropower projects for over five years. Private hydropower producers have been pressuring the government to open the PPA for the hydropower projects in the pipeline.

As soon as the government appointed Hitendra Dev Shakya as the NEA’s chief, the NEA board meeting held on Tuesday night promptly moved ahead to fulfill the demand of the private sector’s power developers. Citing the dispute between the outgoing NEA Managing Director Kulman Ghising and Energy Minister Deepak Khadka, the NEA’s board meeting had been put on hold for the past two and a half months.

Following a series of disagreements between Ghising and Khadka, the Cabinet meeting on Monday decided to sack Ghising from his position. After the dismissal of Ghising, Minister Khadka, backed by the newly appointed NEA Chief Shakya, opened the PPA for the run-of-river (RoR) hydropower projects.

Ghising had been prioritizing the construction of projects under storage and semi-reservoir modalities, including those with pumped storage facilities. According to a hydropower developer, such projects are suitable for the country as they utilize reservoirs to store water and generate electricity during peak demand.

As per a study carried out by the NEA, the per-unit cost of electricity from the pumped storage projects stands at only around one-third of the production cost from RoR type hydropower projects, which is estimated at around Rs 219.2 million per MW. “The increasing threat of climate change has also posed challenges to the reliability and predictability of water flows, which will adversely affect the RoR projects,” the source said.

Meanwhile, the NEA board decided to issue a whitepaper on the financial health of the state-owned power monopoly, suspecting possible manipulation by Ghising while preparing the financial report of the NEA. Energy Minister Khadka has been alleging Ghising of unveiling a fake report over the improvement of NEA’s financial health.

Likewise, the NEA board meeting also approved an amendment to the NEA Employee Service Bylaws. The amended bylaws talk about switching authority over transfers of NEA employees from the authority’s chief executive to the NEA board.

In response to the NEA’s recent decision on the transfer of employees, two trade unions of the NEA have warned of launching protests against the newly appointed NEA Chief.