IPPAN holding a meeting with Finance Minister Bishnu Paudel and Energy Minister Deepak Khadka in Kathmandu. (Photo: IPPAN)
The Independent Power Producers' Association, Nepal (IPPAN), has held discussions with Finance Minister Bishnu Paudel and Energy Minister Deepak Khadka, urging the government to remove the 'Take and Pay' Power Purchase Agreement (PPA) provision proposed in the upcoming budget for hydropower projects.
IPPAN argued that this provision would negatively impact private sector investment and called for its revision.
Energy Minister Khadka clarified during the meeting, "Introducing 'Take and Pay' at this stage is a serious mistake, especially after setting a roadmap for 28,500 MW of electricity production. This will undermine private sector's confidence." He underlined the need to amend the provision.
IPPAN President Ganesh Karki expressed concerns, stating, "This could destroy Nepal’s only promising sector for prosperity. If this continues, projects worth 17,000 MW and investments exceeding Rs 66 billion could be at risk."
Finance Minister Paudel mentioned that further discussions were needed on the matter. He maintained, "First, we must increase domestic consumption, and only then focus on exports."
While the Energy Ministry has indicated efforts to revise the provision, IPPAN has warned that without policy reforms, private investors may withdraw from the sector.
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