Kathmandu. The Independent Power Producers’ Association of Nepal (IPPAN) has urged Deputy Prime Minister and Finance Minister Bishnu Poudel to remove the take-and-pay provision from the budget at any cost.
In a meeting held at the Ministry of Finance on Sunday, Minister Poudel reiterated that the budget would not hamper energy production.
IPPAN Chairman Ganesh Karki said that no promoter would go to nea for PPA as the bank would not invest in hydropower projects. He also said that the promoters would return the license of the project to the government if the state returned the amount spent while working with the license to study the project.
Ippan’s senior vice-president Mohan Kumar Dangi said ippan did not have any objection to other issues in the budget, but the word ‘take and pay’ should be removed as the promoters who have been in the pipeline since 2075, hoping for PPA, are very disappointed.
IPPAN Vice President Uttam Vlon said that the take-and-pay provision should not be introduced if the private sector does not get business permission. He said that if the private sector gets permission to produce and trade electricity, it can find the market itself and build the project, but now that the Electricity Authority is the sole buyer, bringing take and pay is like closing the doors of the private sector.
IPPAN Deputy Secretary General Prakash Dulal said there was no point in doing or not doing PPA in Take and Pay. “What is the point of doing or not doing such a PPA when the bank does not invest?” asked Dulal.
After listening to the IPPAN officials, Finance Minister Poudel said he had no intention of discouraging the private sector and he would take initiative to solve any problem in the construction of the project.
The promoters had strongly objected to the budget announced on May 15 that electricity from river flow-based projects would be purchased only as per take-and-pay provisions to adjust production and consumption. Ippan has also met the Energy Minister, Finance Minister and former Prime Minister on this issue and said that it will have a far-reaching impact on the energy sector.
More than 350 projects of 17,000 MW capacity, which are currently in the study stage and have applied for PPA, are flowing in the river, the future of these projects is in doubt. Rs 66 billion spent on the study of these projects has also been submerged.
Energy Minister Deepak Khadka has said that the Ministry of Energy has not taken the proposal and he has a problem with it.
