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Prime Minister Balendra Shah, who has been promoting prosperity through dialogue with the private sector, held a substantive discussion on Friday with office-bearers of the Independent Power Producers' Association, Nepal (IPPAN). According to IPPAN, the meeting focused on the current state of Nepal's energy sector, the challenges it faces, and possible solutions.

IPPAN Senior Vice President Uttam Bhlon Lama said the discussion covered obstacles to hydropower project construction, the potential role of the private sector in transmission lines and electricity trading, the establishment of data centers and fertilizer plants, the issuance of public shares for power projects, and the growing practice of holding project licenses without making progress.

According to IPPAN General Secretary T.N. Acharya, Prime Minister Shah showed serious interest in six major issues. He questioned the practice of signing Power Purchase Agreements (PPAs) without moving forward with project construction for extended periods and sought clarification on the underlying reasons. He also asked how the private sector could be more effectively involved in transmission line development and electricity trading.

Former IPPAN President Ganesh Karki said the Prime Minister requested a data-based analysis of the potential benefits and risks to the state if the private sector were given greater responsibility in these areas.

"In the past, meetings at this level usually ended with us presenting our demands and returning with promises that everything would be done," Karki said. "This time, however, the discussion was objective and detailed, point by point. It has given us great hope."

Prime Minister Shah emphasized that the energy sector is a key pillar of Nepal's economic transformation, job creation, industrialization, and green development. He said the government is taking seriously the concerns raised by IPPAN regarding the opportunities, challenges, and problems facing energy production and promotion in Nepal.

The Prime Minister also asked about the barriers to establishing data centers and fertilizer factories in Nepal. He expressed particular concern over companies issuing public shares for hydropower projects but failing to build them. According to General Secretary Acharya, the Prime Minister indicated that projects with signed PPAs, projects under construction, stalled projects, and those where only licenses have been obtained should all be addressed under a clear and consistent framework.

During the meeting, the IPPAN delegation reaffirmed the private sector's full commitment to helping achieve the government's goal of generating 30,000 megawatts of electricity within the next 10 years, as well as promoting a green economy, increasing electricity exports, and expanding domestic electricity consumption.

The delegation also highlighted several major obstacles, including delays in PPAs, slow forest and land approval processes, inadequate transmission infrastructure, challenges related to IPOs and rights share issuance, excessive regulatory complexity, and policy uncertainty.

Participants stressed that resolving these issues is essential to achieving the government's energy targets while ensuring that private-sector investment remains secure, efficient, and results-oriented.

IPPAN urged the government to:

Resume the stalled PPA approval process.

Establish separate and appropriate tariff rates for storage and pumped-storage hydropower projects.

Provide electricity to industrial consumers at lower rates to increase domestic consumption.

Pass the Electricity Bill currently under parliamentary consideration within one year after making it more private-sector friendly.

Complete forest land acquisition and tree-felling approvals within one year.

Introduce a "sunset law" to address long-pending project licenses.

Develop clear guidelines for cross-border electricity trade and issue electricity trading licenses.

The delegation also proposed establishing a dedicated Energy Fund for the hydropower sector and expanding access to green bonds, climate finance, foreign investment, and blended finance through policy decisions by the Ministry of Finance and Nepal Rastra Bank.

IPPAN further called for transmission line construction to be treated as a national priority, making grid access simpler and more developer-friendly. It also requested that the government prioritize battery energy storage systems to strengthen grid stability and support research and pilot projects on green hydrogen.

The meeting was attended by Prime Minister Shah's Chief Adviser Kumar Byanjankar and Chief Personal Secretary Subash Sharma. Representing IPPAN were Senior Vice President Uttam Bhlon Lama, former President Ganesh Karki, Vice Presidents Susan Karmacharya and Him Pathak, and General Secretary T.N. Acharya.