Kathmandu. The Independent Power Producers’ Association of Nepal (IPPAN) has submitted a memorandum to Prime Minister KP Sharma Oli on the first day of its pre-announced agitation programme. An IPPAN delegation led by its executive chairman Mohan Kumar Dangi met Oli at the Office of the Prime Minister and Council of Ministers at Singha Durbar on Friday and submitted a memorandum with a message that there was no alternative to going for a strong agitation if the take-and-pay provision announced in the budget was not withdrawn.
Receiving ippan’s memorandum, PM Oli said that the issue of take and pay should be discussed in detail with the energy entrepreneurs. He directed the secretariat to arrange time for the same within Sunday or Monday.
Ippan, an umbrella organization of energy producers, had strongly protested against the budget and program for the upcoming fiscal year 2082/83 BS, which was made public on May 29, 2019, stating that the policy of power purchase agreement (PPA) would be adopted to balance power generation and consumption and the power purchase agreement (PPA) would be made only according to the take and pay (Liu and Tir) concept of the Run of the River (RoR) project.
IPPAN had called for the first phase of agitation from June 10 after it met and discussed with various bodies for three weeks to remove the clause from the budget, but none of the bodies showed seriousness in addressing the demand. Mohan Kumar Dangi, coordinator of the movement committee and executive chairman of IPPAN, said that a memorandum was handed over to Prime Minister Oli on the first day of the protest.
IPPAN has already announced that it will meet the Prime Minister, Finance Minister and Energy Minister for the first phase of the agitation and submit a memorandum, send SMS to withdraw the Take and Pay PPA, send SMS to the Speaker of the House of Representatives and chief whips of all political parties, and jointly issue a statement with all the associations of the private sector.
Ippan has stated in the memorandum that if the government does not withdraw this arrangement, the construction work of more than 350 projects of 17,117 MW capacity will be stopped and rs 66.22 billion spent during the study of these projects has also been submerged.
According to IPPAN, this arrangement has come against the ‘Energy Development Roadmap and Action Plan, 2081’, with a plan to export 15,000 MEGAWATT s of electricity to India and Bangladesh by increasing the generation capacity of 28,500 MW power in the next 10 years.
At present, Nepal Electricity Authority (NEA) is doing PPA on take-or-pay (take or side) concept. This means that after the construction of the hydropower project, the Electricity Authority has ensured the purchase of all the generated electricity. Take and Pay PPA is the provision of taking electricity only if the Electricity Authority considers it necessary. There is no guarantee of purchasing the electricity produced by the Electricity Authority. Therefore, banks and financial institutions do not invest in PPAs in Take and Pay, nor do promoters invest in businesses that are not assured of the market.
In such a situation, the private sector cannot invest more in Nepal’s hydropower, so the possibility of energy crisis in the country has increased due to the migration of the private sector, which has made the country load-shedding free by generating 3,000 megawatts of electricity in a short time.
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