Er.energyNP@Gmail.com

Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha has said that the government will study the status of hydropower projects that have obtained licences but have made no progress for a long time and take necessary decisions based on their classification.

Speaking at a programme organised on Monday to welcome the newly elected executive committee of the Independent Power Producers’ Association, Nepal (IPPAN), Minister Shrestha said the government would provide full support to genuine investors but discourage the tendency of obtaining licences without moving projects forward.

He said the practice of holding licences without making progress by promoters would not be acceptable and urged IPPAN not to protect such activities.

The minister said all issues in the energy sector should not be treated in the same manner and should instead be addressed by prioritising and categorising them.

He said necessary regulations and directives should be introduced along with the new Electricity Act to end policy uncertainty. Minister Shrestha said preparations were underway to expand private sector participation in electricity trading, adding that the role of the private sector should be increased not only in power generation but also in market management, increasing electricity consumption, and transmission and distribution systems.

He stressed the need to prepare a long-term National Transmission Line Master Plan, expressing confidence that it would help end duplication of investment and planning in transmission infrastructure. Stating that the pattern of energy production was changing due to climate change, Minister Shrestha said future energy planning should be based on the concept of an energy mix.

He said that a proposal to appoint an energy counsellor at the Nepali Embassy in India had been forwarded to expand electricity exports, adding that the government was working to strengthen energy diplomacy.

Minister Shrestha said he was positive about forming a high-level mechanism in coordination with the private sector to resolve policy and implementation-related problems in the energy sector.

He said the energy sector should be developed from the perspective of “economic engineering” by linking it with the country’s economic transformation, stressing the need for regular dialogue and cooperation between the government and the private sector.

During the programme, IPPAN submitted a 38-point suggestion to the Ministry of Energy, Water Resources and Irrigation to address policy and structural challenges in energy development.

The suggestions include granting electricity trading licences to the private sector, allowing private sector participation in transmission line construction, making the Electricity Act investment-friendly, developing shared transmission lines, extending licence periods, improving the power purchase agreement (PPA) system, increasing electricity consumption, promoting green energy, and simplifying environmental approval procedures.

IPPAN President Mohan Dangi claimed that Nepal’s national target of generating 30,000 MW of electricity within the next 10 years could be achieved through private sector investment alone if the government provided policy facilitation.

He said delays in signing PPAs, lack of transmission infrastructure, failure to extend the required commercial operation date (RCOD), and licence cancellations had created uncertainty among investors.

He urged the government to resolve overall problems through a high-level mechanism. President Dangi said financial closure was not possible without a PPA and that the practice of cancelling licences on that basis had affected the investment environment.

He also clarified that IPPAN itself was committed to discouraging the unhealthy practice of issuing initial public offerings (IPOs) and rights shares before starting power generation.