Kathmandu. The Independent Power Producers’ Association of Nepal (IPPAN) has urged the Energy and Finance Minister to remove the provision of take-and-pay PPA of hydropower projects in the budget.
In a memorandum submitted to Minister for Energy, Water Resources and Irrigation Deepak Khadka on Tuesday, IPPAN urged him to take initiative for amendments saying the provision of Take and Pay PPA would eliminate this sector. Energy Minister Khadka said that it was a serious error to bring ‘Take and Pay’ in the power purchase agreement after the ministry prepared a road map to produce 28,500 MW of electricity.
In a meeting with the IPPAN representatives at the Ministry of Energy, Minister Khadka said that making the ‘Take or Pay’ PPA provision ‘Take and Pay’ in the budget unveiled on May 15 was against the purpose of the government to build the nation. He clarified that the government has no obligation to go to take-or-pay as the ministry has projected that 13,500 MW would be consumed domestically by 2035 in terms of exports to India and Bangladesh.
Khadka stressed that if nea could not, another company should be formed for power trade, but the matter should be corrected anyway. “If there is a mistake in the budget, then it should be corrected. However, if it is deliberately inserted, the ministry will also stand with the private sector,” he said.
Khadka said that he was of the view that electricity should not be brought from India from next year, but when such things came in the budget, his plan and the government’s path were exactly the opposite. He also said that the state should either build a transmission line or give it to the private sector. He said that the country will not be developed due to the policy of not doing itself and not giving it to others.
Water Resources Secretary Sarita Dawadi said she was not aware of the policy issues in the budget without the suggestions of the concerned ministries in so many years.
Ippan Chairman Ganesh Karki expressed concern over the government’s move to attract the private sector to produce more electricity in view of the increasing export of electricity to India, the export to Bangladesh for the rainy season and the domestic demand is also increasing every year. “In the budget, it seems that the government wants to enjoy the provision of PPA on the basis of demand and supply and take-and-pay,” he asked, adding, “What is it trying to do to bring a roadmap to produce Rs 28,500 and make PPA on take and pay based on demand?” Does the government say electricity has reached now?”
Karki said that if this arrangement is not implemented, the 17,000 MW capacity projects with the private sector will be ‘nailed’ and more than Rs 66 billion investment so far will also be submerged in it.
IPPAN senior vice-president Mohan Kumar Dangi said minister Khadka would be blamed for ending the energy sector if this system was not implemented. “We remember Shailaja Acharya starting PPAs with the private sector in 2051. There is an opportunity to make a way for the present Energy Minister Khadka to be remembered in the same way. Otherwise, there will be a negative stain that the energy sector has run out from your time,” Dangi said.
Dangi said that the take-and-pay provision in the budget has not been forgotten and the Executive Director of the Electricity Authority has already indicated in a program organized by IPPAN in this regard.
Soon after meeting Energy Minister Khadka, the IPPAN team reached the Ministry of Finance to meet Deputy Prime Minister and Finance Minister Bishnu Poudel. Ippan had also urged Finance Minister Poudel to correct the take-and-pay provision, saying the sector would be wiped out if it was not implemented.
IPPAN Chairman Karki urged the government to correct the budget provision as it was against the roadmap to produce 28,500 MW. Senior vice-president Dangi also urged the government to correct the energy sector as it would be destroyed if the provision of take-and-pay PPA was maintained.
After the meeting, Finance Minister Poudel said that he would respond only after consulting on the matter. Stating that he was in favour of increasing the consumption in the country rather than selling electricity, he said that he should move towards exporting only if he avoids consuming it.
