Kathmandu. The Government of Nepal has announced to purchase electricity from hydropower projects based on river water flow only under the ‘Take and Pay’ policy.
Deputy Prime Minister and Finance Minister Bishnu Poudel presented the fiscal year 2082 BS in the federal parliament on May 15. He announced that such a provision would be implemented in the purchase of electricity through the budget and program of 83.
With this announcement of the government, the Independent Power Producers Association (IPPAN), a common organization of private sector-promoted hydropower project construction companies, has come out in protest. It has also threatened to launch an agitation if the government does not withdraw its decision.
What is tech and pay
‘Take and Pay’ policy is one of the various policies implemented in the Renewable Energy Buy and Sell Agreement. Apart from this, the ‘Take or Pay’ policy is also applicable to the purchase and sale of electricity of hydropower projects.
Nepal Electricity Authority (NEA), which has the monopoly to purchase and distribute electricity, has so far reached an agreement to pay all the amount as per the agreement even if it does not consume electricity. TAG_OPEN_div_60
For example, if a child studying in a private school has to pay the canteen fee (lunch amount) for 12 months even if he is served lunch at school or if he cooks lunch from home some day, then this is the situation of take-or-pay, where even if the lunch is not eaten, the whole year’s lunch expenses have to be paid. In this case, the seller (school) side is at a profit and the customer (parent) side is at a loss.
On TAG_OPEN_div_56 the other hand, if a child studying in a private school has to pay the canteen fee only on the day of the lunch in the school, if the parent does not have to pay the lunch fee for the day the child does not eat the school lunch without prior notice, then this situation is called take and pay. Where the lunch expenses are paid only by calculating the day of lunch, there is no need for other days. In this case, the seller (school) side is in relative loss and the customer (parent) side is at a loss. Since the cost of running the canteen (salary, sanitation, the amount of area used for the canteen) is the same for 12 months, there is a situation of loss due to uneven sale of lunch to the seller party.
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