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Minister for Energy, Water Resources, and Irrigation Biraj Bhakta Shrestha has said that the government will put an end to the practice of obtaining licenses for electricity projects but failing to develop them for extended periods. He stated that such hydropower projects will be reviewed and categorized, and necessary decisions will be made based on their classification.

Speaking at a program held on Monday to welcome the newly elected executive committee of the Independent Power Producers' Association, Nepal (IPPAN), Minister Shrestha clarified that the government would provide full support to genuine investors.

"It is unacceptable for any project developer to simply hold onto a license without moving forward with construction, and IPPAN should not protect such activities," he said.

The minister also informed participants that the government is preparing to expand private sector participation in electricity trading. He emphasized the need to increase the private sector's role in market management, electricity consumption, and the transmission and distribution system.

He expressed confidence that the preparation of a long-term National Transmission Master Plan would eliminate duplication in transmission infrastructure investment and overlapping project planning.

Noting that climate change is altering the nature of energy production, Minister Shrestha said future energy planning should be based on the concept of an energy mix. He also revealed that the government has proposed appointing an Energy Attaché at Nepal's Embassy in India to help expand electricity exports and strengthen energy diplomacy. According to him, the Ministry of Energy has already submitted this proposal to the Ministry of Foreign Affairs. He further stressed that the energy sector should be developed from an economic engineering perspective to drive Nepal's broader economic transformation.

IPPAN Submits 38-Point Recommendation

During the event, IPPAN submitted a 38-point recommendation to the Ministry of Energy, outlining policy and structural reforms needed to address challenges in Nepal's energy sector.

The recommendations include allowing private sector participation in electricity trading, enabling private investment in transmission line construction, making the Electricity Act more investment-friendly, developing shared transmission lines, extending the validity period of project licenses, reforming the Power Purchase Agreement (PPA) system, increasing domestic electricity consumption, promoting green energy and simplifying environmental approval procedures.

Presenting the recommendations, IPPAN President Mohan Dangi claimed that if the government introduced supportive policies, the private sector alone could achieve the national target of generating 30,000 MW of electricity within the next 10 years.

He said delays in signing Power Purchase Agreements (PPAs), the lack of transmission infrastructure, the policy of not extending the Required Commercial Operation Date (RCOD), and the cancellation of project licenses had created uncertainty among investors. He urged the government to establish a high-level mechanism to resolve these issues comprehensively.

Dangi also argued that financial closure is impossible without a PPA, and that canceling project licenses because developers have not achieved financial closure creates a poor investment climate.

High-Level Committee to Be Formed

According to IPPAN, Minister Shrestha announced that the ministry would form a high-level committee that includes private sector representatives and would operate under a clear mandate.

He noted that private developers currently spend too much time visiting government offices in Singha Durbar to resolve policy and implementation issues instead of focusing on project development. He said the proposed committee would provide a structured mechanism to address these problems through legal and institutional reforms.

The minister also argued that the government and private sector should jointly establish a committee to develop Nepal's electricity trading market.

At the event, IPPAN President Dangi reaffirmed the association's commitment to maintaining professionalism and ethical standards in the energy sector. He stated that IPPAN would not protect any individual or company involved in improper or unethical practices.