Investment from private sector power producers will cross Rs 3 trillion by 2035 amid the aggressive investment plans forwarded by the developers.

Ganesh Karki, president of the Independent Power Producers’ Association of Nepal (IPPAN), said the private sector has already invested over Rs 1.3 trillion in overall 725 energy related projects that they have forwarded with capacity totaling 34,484 MW. “They have come up with aggressive investment plans in the next one decade,” said Karki, speaking at the 23rd annual general meeting of the IPPAN on Tuesday.

According to the IPPAN, the country’s electricity production capacity has surged from 252 MW to 3,625 MW in the past 33 years. The private sector shares around 81 percent in the total electricity production.

Considering the under construction and pipeline projects along with the operating ones, the country’s total production capacity will stand at 8,498 MW. In addition, 11,421 MW of the projects have conducted power purchase agreements with the Nepal Electricity Authority.

Karki however said that the power producers have been facing a notable obstacle in terms of the legal procedures and structural bases in the hydropower sector. “Despite the government commitment to simplify hydropower production, the private sector has been facing a number of legal complexities and government apathy,” he said.

The government has endorsed a roadmap to produce 28,500 MW of electricity within the next one decade. However, private power developers have been facing a number of problems such as the government’s reluctance to implement a one-door system in the energy sector.

Last year, Nepal exported electricity worth Rs 17 billion to its neighboring countries, while the government has aimed to increase the earnings from cross-border power trading to Rs 23 billion this year. “Despite having huge potential, the private sector is largely affected by legal obstacles related to forest, environment and land,” said Karki.

Karki further urged the government to bring in plans to increase domestic consumption rather than focusing on export of the produced hydroelectricity. “The private sector has also accorded top priority to increasing power consumption inside the country.”

Allowing the private sector to take part in the construction of transmission lines, distribution and trading of electricity and production of hydrogen are among the demands of the IPPAN. The umbrella organisation has also urged the government to allow the private sector for cross-border power trade.