Independent Power Producers’ Association of Nepal (IPPAN) and ProClime signed a significant Memorandum of Understanding (MoU) at the ‘Unlocking Green Monetisation of Nepal's Hydropower’.

This ‘landmark’ agreement aims to enable the issuance of up to 2000 MW of International Renewable Energy Certificates (IRECs) for the Nepal market, unlocking significant economic and environmental benefits for the country's hydropower sector.

IPPAN President Ganesh Karki and Chief Executive Officer of ProClime Kavin Kumar Kandasamy exchanged a memorandum of understanding at a programme organised in Lalitpur on Friday.

The agreement signed by IPPAN with ProClime will make 2000 MW of electricity out of the 2700 MW of electricity generated by the private sector in Nepal eligible for carbon trade in the first phase.

With this agreement, Nepal's private sector will be able to trade carbon worth about Rs. 1 billion annually, said IPPAN President Karki.

The MOU will be signifying a collaborative effort to promote the development and green monetization of Nepal's hydropower sector.

ProClime CEO Kandasami said that as India, Bhutan and Sri Lanka are benefiting from carbon trading, Nepal is also going to make good use of this opportunity.

Vice President of International Hydropower Association (IHA) Sushil Pokharel said that the hydropower projects being built in Nepal are meeting the standards of sustainable development and Nepali projects will also soon receive money from carbon trading.

Launch of IREC Calculator

During the programme, Chairman of Electricity Regulatory Commission Dr. Ram Prasad Dhital officially launched the IREC Calculator designed for Nepal.

The Nepal IREC Calculator is a groundbreaking tool that empowers Nepal's power producers to assess and leverage the value of renewable energy certificates associated with their hydropower projects.

Stating that Nepal has not been able to benefit even though carbon trading is taking place in the global market, Chairman Dr. Dhital emphasised that Nepal, which has a huge potential for hydropower and is currently producing more than 3,000 megawatts of hydropower, should now also benefit from carbon trade.

Joint Secretary at the Ministry of Forests and Environment Dr. Maheshwor Dhakal said that although Nepal has received money for carbon emissions from forests on a small scale, hydropower projects have not yet been able to benefit from it.

Senior energy expert at the Ministry of Energy, Water Resources and Irrigation Prabal Adhikari expressed confidence that Nepal, which is exporting electricity to the regional market, will soon be able to earn good income from carbon trade.