Energy entrepreneurs have announced protests against the ‘take-and-pay’ provision in the budget for the upcoming fiscal year.

Finance Minister Bishnu Paudel’s failure to signal any revision to the ‘take-and-pay’ PPA provision in the budget for the upcoming Fiscal Year 2025/26 reportedly prompted the announcement of the protests.

The Independent Power Producers Association Nepal (IPPAN) has declared a phase-wise protest program demanding the amendment of a budget provision stating that “run-of-the-river projects will be signed under take-and-pay PPA arrangements.”

IPPAN argues that this provision must be revised, citing that Nepal’s electricity generation capacity has reached 3,600 megawatts, with 80 percent contributed by the private sector.

The private sector argues that banks are unwilling to invest under the take-and-pay electricity purchase arrangement. According to the IPPAN, this provision puts at risk approximately Rs 66 billion already invested in over 350 projects under study, with a combined capacity of around 17,000 megawatts.

IPPAN has announced a series of protest actions. On June 20, it plans to submit a memorandum to the Prime Minister, the Energy Minister, and the Finance Minister. On June 21, it will send SMS messages to the Prime Minister, Finance Minister, Energy Minister, and the Executive Director of the Nepal Electricity Authority, urging them to withdraw the take-and-pay provision. On June 22, messages calling for the withdrawal of the take-and-pay PPA policy will be posted on social media.

Similarly, on June 23, IPPAN plans to hold discussions with various private sector associations regarding the impact of the take-and-pay provision and will issue a joint statement.

On June 24, a mass SMS campaign will be conducted, targeting the Speaker of the House of Representatives and chief whips of major political parties, requesting them to revoke the take-and-pay policy, according to IPPAN’s Acting President Mohan Kumar Dangi.