IPAN Chairman Urges Nepal Electricity Authority to Sign PPAs with Private Projects

Kathmandu. Independent Power Producers' Association Nepal (IPAN) Chairman Mohan Dangi has urged the Nepal Electricity Authority to immediately sign Power Purchase Agreements (PPAs) for private sector projects. IPAN has demanded the government allow the private sector to trade electricity if the Nepal Electricity Authority cannot buy all the electricity produced. Chairman Mohan Dangi of IPAN stated that approximately 66 billion rupees of private sector investment is at risk in projects awaiting PPAs. ‘We will produce electricity and give it to the Authority. But if the Authority cannot trade at this level, then for the security of our investment, please grant permission for electricity trading to the private sector as soon as possible. This is not our desire but a compulsion,’ he said. He mentioned that the private sector's technical and financial capacity has increased, with projects up to 341 MW currently under construction and projects of 440 MW in the financial management stage. IPAN's main demand is to change the design standard for hydropower projects from Q40 to Q25. Citing the example of Arun-3 being built at Q20, he claimed that changing the design would increase capacity by 85 percent, reduce production costs, and increase the capacity of projects awaiting PPAs to over 50,000 MW. He suggested declaring LP gas-prohibited areas by supplying electricity through dedicated feeders to at least one ward in each of the 77 districts to increase domestic electricity consumption. He stated that exporting 15,000 MW of electricity would bring in approximately 366 billion rupees annually, and consuming the same amount domestically would triple the economy. He recalled that the private sector, which entered this sector in 2055 BS, has now reached about 80 percent of the total electricity production and has proven its ability to build transmission lines as well. Therefore, he has drawn the attention of the Energy Minister to grant permission for electricity trading and transmission line construction to the private sector, ending traditional practices like stopping PPAs and not extending project deadlines.