Kathmandu. Finance Minister Bishnu Prasad Poudel has given a clarification on point number 227 of the budget. Minister Poudel has given a clarification saying that the point has become very controversial.
Point number 227 of the budget states, ‘
Substations and transmission lines will be constructed in a manner that is consistent with the schedule for the completion of the hydropower project. A policy will be adopted to enter into power purchase agreements to maintain a balance between power generation and consumption. Power purchase agreements will be entered into in accordance with the take and pay concept of the run-of-river project.’
Speaking in the House of Representatives, Minister Poudel has given a clear message that the government will not back down from take and pay. He has repeated twice, “Only projects that have been identified for energy consumption and export based on financial risk and for which the Nepal Electricity Authority has ensured payment of liabilities can be contracted.”
This is what the Finance Minister said
The intention of budget item number 227 is not to let the generated electricity go to waste. The aim is to attract private investment in projects that provide returns with certainty of energy consumption, ensure investment from the banking sector, prioritize investment in reservoir and semi-reservoir storage picking run-of-river projects, and ensure the potential liability of the Government of Nepal to meet the existing energy needs during the dry season.
However, the way this issue has been raised in the assembly. In the meantime, we have passed the important Energy Roadmap 2081. The Council of Ministers has passed it after extensive discussions. This roadmap has set a target of generating 28,500 megawatts of electricity by 2035.
Under which there will be 10,000 semi-reservoir projects. There will be 5,900 semi-reservoir projects. 12,000 megawatts will be based on the ‘Run of River’ project.
The PPA for 9,500 megawatts of projects based on the ‘Run of River’ project has been completed. By 2035, only 1,500 megawatts are available.
Considering all these facts, I would like to clarify further in this meeting
Based on financial risk, agreements can be made for projects that have been identified for energy consumption and export and for which the Nepal Electricity Authority has ensured payment of liabilities. I think that this approach will lead to the right conclusion.
The government is clear that government investment alone in energy development is not sufficient. For this, the private sector has also been playing a role in the energy sector. The question is how much, but only whether energy production, energy consumption, and transmission can be matched.
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