The committee has proposed eliminating the traditional "first come, first served" system in favor of competitive bidding, while actively pushing to scrap the licenses of inactive promoters who hold onto projects without progressing.
The expert panel submitted its comprehensive review report to Minister for Energy, Water Resources, and Irrigation Biraj Bhakta Shrestha. Minister Shrestha confirmed that the government intends to implement the legal and technical recommendations immediately.
The report highlights critical gaps in policy, finance, and technical execution under the Department of Electricity Development. To address these, the committee recommended several structural changes. It recommends transition to transparent and competitive bidding system from existing "first come, first served" method for issuing licenses.
The committee also recommends to cracking down on inactive licensees. Acting under Section 8 of the Electricity Act, 2049, the government is suggested to initiate the process to revoke licenses of promoters who fail to start construction long after signing their Power Purchase Agreements (PPAs).
The report calls for an end to overlapping authorities between the Ministry of Energy, the Ministry of Industry, and the Investment Board Nepal regarding project approvals and investment clearance. Moreover, the committee suggests to Codify Regulations. Vital processes such as license amendments, the management of a Project Bank, and the sale or transfer of licenses will be legally binding at the regulatory level, moving away from temporary ministry directives.
The committee emphasized that existing contradictions between the Electricity Act (2049), Electricity Regulations (2050), and the Hydropower Development Policy (2058 BS) must be reconciled.
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Identified Problem
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Proposed Solution
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Expired Production Licenses
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Establish clear legal provisions governing ownership transfer, operational management, and revenue collection after a license expires.
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Delayed Environmental Clearances
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Introduce legal mandates to fast-track Forest, National Park, and Environmental Impact Assessments (EIAs) within 12 months.
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Land & Project Obstacles
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Enact a "Sunset Law" to eliminate chronic delays in land acquisition, forest land use, and explosive procurement.
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The committee has urged the ministry to draft a brand-new Electricity Act to explicitly outline electricity trading guidelines and define the specific jurisdictions of Federal, Provincial, and Local governments. Additionally, they recommended the immediate formulation of master plans for national electricity development, transmission lines, power demand, and minimum-cost generation.
