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Minister for Energy, Water Resources and Irrigation, Biraj Bhakta Shrestha, has stated that he wants to move forward with IPPAN - the umbrella organization of energy producers - not merely as a stakeholder body but as a partner institution.

During a discussion held on Wednesday at Singha Durbar with a delegation led by Ganesh Karki, President of the Independent Power Producers’ Association, Nepal (IPPAN), Minister Shrestha said that the private sector, which has contributed more to Nepal’s energy system than the state, will be treated not just as a stakeholder but as a partner entity.

He also mentioned that since the newly formed government and the ruling party prioritise the energy sector highly, some positive programs will be implemented through the upcoming budget.

Emphasizing the need for reforms where systems govern individuals and institutions - not the other way around - Minister Shrestha said he intends to introduce a Research and Development (R&D) policy.

Referring to past data showing how much electricity was generated when only the government was involved in power production, he clarified that a single-buyer model is no longer feasible in line with the needs of both the state and the private sector, and expressed his support for a multiple-buyer system.

He stressed that a lack of public awareness is one of the reasons behind local obstruction to hydropower projects as well as transmission line construction. Therefore, he emphasized that the government and private sector should jointly conduct awareness programs. Minister Shrestha noted that people need to understand that if energy infrastructure is not built on time, not only industrialists but the entire country will suffer. He also said the government is ready to support in formulating necessary policies to build stronger engagement with the public.

IPPAN President Ganesh Karki stated that since the National Independent Party (Rastriya Swatantra Party – RSP) is leading a single-party government, there is an expectation that the government will address all issues in the energy sector by categorizing and implementing tasks outlined in its manifesto and 100-point action plan within one month, three months, six months, and one year.

Karki also said that if policy-related issues and procedural issues are handled separately, tangible results could be achieved within three months.

Expressing concern, he added that institutions established to facilitate the private sector have instead begun causing difficulties. He stressed that practices such as dual regulation and double penalties by bodies like the Nepal Electricity Authority, Department of Electricity Development, and the Electricity Regulatory Commission must be ended immediately.

“Major headlines appear saying projects failed to provide dividends, but it is never reported - or is deliberately ignored - that companies could not pay dividends because the government did not build transmission lines or purchase electricity,” said President Karki. “If the contingency provision is not removed, companies will lose their ability to pay dividends, and entrepreneurs themselves could end up on the streets.”

Referring to a project whose Environmental Impact Assessment (EIA) was approved in 2020/21 AD but has still not received tree-cutting permission, while the Nepal Electricity Authority has refused to extend the RCOD deadline, Karki questioned Minister Shrestha: “Is this the fault of the developer or the state? If the delay is due to the state, why isn’t the RCOD extended? Continuous penalties at every step have intimidated and discouraged the private sector.”

He also accused the Nepal Electricity Authority (NEA) of acting arbitrarily in some cases by refusing to purchase electricity even after projects had begun generating power.

Karki further drew the minister’s attention to the issue that, although there is a legal provision requiring shares to be allocated to locals, delays in approval from the Securities Board have led to public dissatisfaction.

He added that investors in 22 companies have been severely affected because CDSC has not listed promoter shares for the past 14 months, citing issues related to dual ISINs.

Stating that a Supreme Court order prohibiting work in national park areas has put around 20,000 MW of projects at risk, Karki urged the government to create an environment for project development - even if it requires reducing the boundaries of protected areas.

IPPAN Deputy General Secretary Prakash Dulal said the government does not need to wait six months to address key issues such as extending license periods to 50 years, finding markets for generated electricity, extending RCOD deadlines, facilitating PPAs, and moving forward files of dozens of projects stalled due to lack of tree-cutting permits.

He also stressed that there is no need to delay decisions on allowing hydropower projects to operate without license renewal requirements throughout the license period, creating a conducive environment for IPO issuance, and resolving the dual ISIN issue.

Former IPPAN President Shailendra Guragain emphasized the need to separate and resolve policy-level and procedural problems.

He stated that since the government lacks the funds to build additional transmission lines, if the responsibility is handed over to the private sector, all transmission lines could be completed within three years, Guragain said.

Nepalkhabar