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The Independent Power Producers’ Association, Nepal (IPPAN) has submitted 13 demands and suggestions to the Department of Electricity Development concerning power project construction, licensing, transmission and environmental approvals.

An IPPAN delegation that visited the department to congratulate newly appointed Director General Sagar Raj Gautam and wish him a successful tenure called for policy and procedural reforms to address the problems faced by the private sector.

Director General Gautam said the department would move forward with its policy and implementation work in cooperation with the private sector for the development of the energy sector. Noting that the processing of files received by the department is currently moving at a faster pace, he expressed his commitment to making the working system more streamlined, effective and time-bound in the coming days.

IPPAN President Mohan Kumar Dangi said the Department of Electricity Development is the first point of contact for the private sector and that licensing, approvals and other procedures should therefore be made easier and more time-bound.

Do not cancel licenses due to lack of PPAs

President Dangi said the existing provision under which a power generation license is cancelled if financial closure cannot be achieved within two years of obtaining the license should be amended.

He said it would be unfair to cancel licenses simply because a project does not have a power purchase agreement, particularly when many projects have been unable to achieve financial closure because the Nepal Electricity Authority has kept the PPA process on hold for a long time.

“The important question is how financial closure can be achieved when a PPA itself cannot be concluded,” Dangi said. “It is not fair to cancel licenses by holding the private sector responsible when the PPA process has been halted by a government agency.”

IPPAN has demanded that a transmission line license be issued simultaneously when a power generation license is issued. According to IPPAN, the current requirement to follow separate procedures for generation projects and transmission lines causes delays in project development and adds administrative complications.

It has also called for the elimination of duplication in approval procedures handled by different divisions of the department and the implementation of an integrated and time-bound process.

Call for simpler environmental approval process

IPPAN has called for the environmental study process, including Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA), to be made simpler, integrated and time-bound. It has suggested eliminating the requirement to conduct a completely new environmental study for minor design or structural changes and instead allowing such changes to be addressed through a supplementary environmental study.

IPPAN also said the requirement to conduct repeated public hearings at different stages for the same project should be reviewed.

IPPAN has additionally demanded that the term of power generation licenses be maintained at 50 years in accordance with the Electricity Act, 1992.

Relief for projects damaged by disasters

IPPAN has demanded that the license period of hydropower projects severely damaged by floods and other natural disasters be extended by at least two years. It has also called for customs and duty exemptions on the import of machinery and spare parts required for reconstruction.

Similarly, it has demanded that if a project survey license is at risk of cancellation due to environmental approvals, government agencies or force majeure rather than the fault of the developer, the license or application should remain valid.

IPPAN said the practice of imposing fines for minor deficiencies in submitted information should be ended and that the authorities should instead coordinate with the concerned company and request the necessary details.

Focus on shared transmission lines

IPPAN has called for the construction of shared transmission lines to be encouraged for projects being developed along the same river corridor. It has also urged the authorities to establish mechanisms for necessary coordination among projects in the development and operation of the transmission system.

IPPAN has demanded arrangements allowing solar projects to connect to the same substation if changes to their design become necessary, as well as facilitation for projects seeking to expand their capacity.

It has also called for a policy to provide appropriate compensation to downstream projects if the development of large storage projects in upstream areas directly affects them. In addition, it has demanded that procedures for exemptions and other relief measures for projects delayed due to floods, environmental studies, government agencies or force majeure be given priority.

Nepalpurbadhar