KATHMANDU: The Independent Power Producers’ Association, Nepal (IPPAN), has voiced serious concerns regarding the recently released monetary policy for the fiscal year 2081/082 by Nepal Rastra Bank (NRB). IPPAN, representing private sector hydropower developers in Nepal, argues that the policy lacks provisions to attract and facilitate private investment in the country’s energy sector.
Hydropower in Nepal has seen significant growth over the past two and a half decades, with the private sector completing 182 projects generating a total of 2,500 megawatts. Additionally, 137 projects with a capacity of 3,900 megawatts are under construction, and another 136 projects, totaling 3,900 megawatts, are awaiting financial management post power purchase agreements (PPAs) with the Nepal Electricity Authority. These developments highlight the pivotal role of the private sector in Nepal’s energy development.
Despite this progress, the new monetary policy has drawn criticism for its perceived lack of support for private sector energy developers. IPPAN’s representatives presented their demands during a discussion event at Thapathali, attended by NRB Governor, and submitted them in writing. However, the monetary policy did not address these demands, leading IPPAN to label the policy as anti-private sector and discouraging to investors.
The Nepalese government has frequently emphasized creating an investment-friendly environment for energy production, as seen in the 16th Five-Year Plan by the National Planning Commission and various government policies. These initiatives recognize the significant role of private sector investment in energy production. However, the current financial and monetary policies appear to neglect these commitments, causing concern among private investors.
IPPAN also highlighted other issues, such as the introduction of a more regressive Electricity Bill compared to the Electricity Act, 2049, and the lack of implementation of decisions made by the Ministry of Energy to solve private sector issues. Additionally, the absence of policies to support the bilateral agreement to export 10,000 megawatts of electricity to neighboring countries within 10 years has further eroded trust in the government’s reliability and commitment to energy development.
The hydropower sector in Nepal is crucial for the country’s economic growth and energy security. IPPAN urges immediate policy and implementation improvements to encourage private sector energy developers. Failing to address these issues could result in significant setbacks in overall energy development and hinder the achievement of the government’s goals, ultimately affecting Nepal’s economic stability.