Kathmandu, June 12: A high-level committee recommended the government to revoke the licences of 38 hydropower projects with a total capacity of 1,388 MW that remained at zero progress for long after signing Power Purchase Agreements (PPAs)
The committee formed by the Ministry of Energy, Water Resources and Irrigation to review the current status of licences issued by the Department of Electricity Development in accordance with 74 (b) of the government’s 100-point governance reform action plan has identified such projects and recommended the cancellation of their licences to the ministry.
The five-member committee, chaired by Mohan Shakya, Joint Secretary at the Ministry of Energy, Water Resources and Irrigation, handed over the report to Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha on Tuesday.
According to the ministry, the committee placed 15 hydropower projects with a combined capacity of 220 MW on the priority list, as these projects had achieved more than 50 per cent overall progress within five years of obtaining production licences. Similarly, it recommended encouraging 131 projects with a total capacity of 5,642 MW that had made nearly 50 per cent progress during the same period.
In addition, 38 projects with a capacity of 1,124 MW in mixed status that are currently under construction but have not been able to work as per the target due to various reasons have been placed on the list of projects that require facilitation for their early completion. However, it has recommended that 75 projects with a capacity of 4,121 MW, whose progress was extremely poor during the same period, be placed on the list of problematic projects and action taken.
The budget statement for Fiscal Year 2026/27 states that licences of projects that have been signed PPAs but failed to begin construction will be revoked. This provision has paved the way for action against projects that obtained licences but remained inactive for a prolonged period, said the ministry.
Meanwhile, the committee report also states that the DoED has recommended cancellation of licences for 11 projects with a combined capacity of 169 MW that obtained production licences before 2019 but have shown no progress to date.
The report noted that these projects failed to comply with the conditions of their production licences and did not act in accordance with Rule 21 of the Electricity Regulation, 1993. Therefore, it recommended proceeding with cancellation under Section 8 of the Electricity Act, 1992.
In line with the budget announcement, the committee has also identified 176 projects with a capacity of less than 10 MW that require immediate PPAs. The total capacity of such projects is 1,164 MW. The committee has also recommended for issuing survey licences through a competitive process based on national priorities to achieve national goals.
The committee has suggested formulating a 5-year electricity development plan for the integrated development of the energy sector and accordingly preparing plans for consumption, export, transmission, distribution and production.
It also highlighted the need to remove existing uncertainties regarding ownership transfer, operation management, and revenue collection after the expiry of production licences and to establish legal provisions aligned with national interests. #nepal
