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The government has decided to extend the generation license period for reservoir-based hydropower projects to 50 years.

The Ministry of Energy, Water Resources and Irrigation has made this decision, increasing the license period from 45 years to 50 years for such projects.

Considering the long study and preparation period, high costs, and returns associated with reservoir-based projects, the government has decided to fix the license duration at 50 years.

Energy Minister Biraj Bhakta Shrestha has directed the Department of Electricity Development to complete the process within 45 days. The decision aims to strengthen energy security and attract greater private sector participation in reservoir-based projects.

The decision has been taken by the government led by Rastriya Swatantra Party (RSP). In its election manifesto, the party had committed to extending the license period of all types of projects to 50 years. The Electricity Act, 1992 also states that projects with more than 50 percent Nepali investment can have a license period of up to 50 years, with provisions for renewal before expiry. Based on this, RSP had pledged to standardize the generation license period at 50 years.

The private sector has welcomed the decision and urged the government to implement its manifesto commitments.

President of the Independent Power Producers’ Association, Nepal (IPPAN), Ganesh Karki, has called for extending the license period to 50 years for all types of projects, as mentioned in the party’s manifesto. He emphasized that clean energy is essential for building a prosperous Nepal and urged the government to promote private sector participation. He added that increasing the license period would differentiate the current leadership from previous governments, which often made commitments without delivering. He also urged RSP not to forget its commitments.

Currently, the generation license period is 35 years for domestic investment and 30 years for foreign investment. The Department of Electricity Development has been issuing licenses with a 35-year duration to domestic developers for run-of-river and semi-reservoir projects.

IPPAN Treasurer Narendra Ballabh Panta also stressed that the government should not forget its manifesto. He said implementing these commitments presents an opportunity to achieve prosperity through energy development. He added that if the government facilitates the private sector, which is capable, it could open the door to broader development.

Nepalpurbadhar