The government is launching a comprehensive study to classify and review underperforming projects. While genuine investors will receive full state support, those holding onto licences as mere paperwork will face strict regulatory action.
"The practice of holding licences without making progress by promoters will not be acceptable," Minister Shrestha warned, urging IPPAN to refrain from protecting such activities.
A Strategic Shift: Policy, Transmission, and Climate Reality
Beyond cracking down on stagnant projects, the Minister outlined a forward-looking vision to eliminate policy uncertainty and modernize Nepal’s energy infrastructure:
The New Electricity Act: The government is working on introducing robust regulations and directives alongside the upcoming Electricity Act to provide long-term policy clarity.
Expanding Private Sector Roles: Private companies won't just be limited to power generation anymore. The state aims to loop them into electricity trading, market management, domestic consumption, and transmission/distribution networks.
A Master Plan for Transmission: To avoid duplicate investments and erratic planning, a long-term National Transmission Line Master Plan is currently in the works.
Embracing the Energy Mix: Acknowledging the harsh realities of climate change on water flows, future energy planning will shift away from pure hydro dependency toward a diversified energy mix concept.
Strengthening Energy Diplomacy: In a bid to boost electricity exports, a proposal has been forwarded to appoint a dedicated energy counsellor at the Nepali Embassy in India.
IPPAN’s Counter-Proposal: What the Private Sector Needs
While supportive of growth, IPPAN President Mohan Dangi highlighted the massive bottlenecks investors currently face. IPPAN submitted a comprehensive 38-point suggestion list to the Ministry, arguing that Nepal’s ambitious national target of generating 30,000 MW within the next 10 years is entirely achievable through private investment—if the government irons out existing policy hurdles.
Key Demands from IPPAN Include:
Granting private sector licences for electricity trading and transmission line construction.
Streamlining and accelerating the Power Purchase Agreement (PPA) system.
Simplifying tedious environmental approval procedures and extending licence periods.
Resolving the catch-22 situation where licences are cancelled due to a lack of financial closure, which itself cannot be achieved without a signed PPA.
President Dangi also assured the government that IPPAN is independently committed to weeding out unhealthy market practices, such as companies issuing Initial Public Offerings (IPOs) and rights shares well before actual power generation begins.
The Way Forward
Both the ministry and IPPAN agreed that the energy sector needs to be viewed through the lens of "economic engineering" to drive Nepal's macroeconomic transformation. Minister Shrestha expressed strong optimism about forming a high-level mechanism in coordination with the private sector to bridge the gap between policy making and real-world implementation.
