An agreement has been reached between the Independent Power Producers' Association, Nepal (IPPAN) and Pioneer Law Associates (PLA) for a policy study on green taxonomy specifically for hydropower projects.

IPPAN President Ganesh Karki and PLA Director Anupraj Upreti signed a Memorandum of Understating for studying green taxonomy and climate financing in Kathmandu on Friday.

He said that IPPAN has initiated this study as it appears that the necessary capital for the government to generate 28,500 megawatts of electricity can be raised through green financing.

Karki expressed confidence that this study will also help the government formulate a policy related to green financing.

IPPAN Senior Vice President Mohan Kumar Dangi said that although agriculture, energy and tourism are key sectors for the country's development, the government has realised that energy can bring faster results than others.

He said that the private sector has initiated various studies on how to make the country prosperous through energy and the study on green taxonomy is one of them.

PLA director Upreti said that he was excited to conduct a study on green taxonomy in collaboration with IPPAN.

He said that he was also excited about this study on the energy sector as he had previously studied the proposed Electricity Bill.

As per the agreement, Pioneer will focus on three main topics.

It will study the development of guidelines on green taxonomy, especially for hydropower projects, advocate for a green transition that will support Nepal's hydropower sector and study opportunities for climate, green and energy financing to increase the capacity of Nepal's hydropower projects, according to the IPPAN.

The Company will study the best models in the world to determine what kind of green taxonomy is needed for Nepal's hydropower projects and recommend a model suitable for Nepali soil.

Similarly, this study will also research the issues of carbon trading and find out the necessary policies and agencies that will act as a bridge between private-sector hydropower projects and the government.

To make the study successful, a joint working committee will be formed with 4 members from Pioneer and three from IPPAN.

The committee will prepare the study report by August 2025 and hand it over to IPPAN, said the IPPAN.