KATHMANDU, June 20: The Independent Power Producers Association Nepal (IPPAN) has launched a series of phase-wise protests demanding the government revoke a budgetary provision that mandates “take-and-pay” Power Purchase Agreements (PPA) for run-of-the-river hydropower projects.

This policy, introduced in the budget for Fiscal Year 2025/26 and left unchanged by Finance Minister Bishnu Paudel, has sparked significant backlash from energy entrepreneurs, who argue that it threatens the viability of Nepal’s burgeoning private energy sector.

IPPAN contends that under the take-and-pay arrangement, banks are reluctant to finance hydropower projects, as the model lacks guaranteed returns. The association warns that this could jeopardize investments worth around Rs 66 billion already committed to more than 350 projects currently under study, which collectively have a potential capacity of about 17,000 megawatts.

With Nepal’s total electricity generation capacity reaching 3,600 megawatts—80 percent of which is contributed by the private sector—IPPAN stresses that failing to amend the provision could derail future growth in the energy sector.

As part of its protest program, IPPAN has outlined a series of coordinated actions. It began on June 20 by submitting memorandums to the Prime Minister, Finance Minister, and Energy Minister. The following day, June 21, IPPAN supporters are sending SMS messages to these officials and the Executive Director of the Nepal Electricity Authority, urging them to scrap the take-and-pay clause.

The movement continues on June 22 with a social media campaign amplifying calls for the withdrawal of the policy. On June 23, IPPAN will hold consultations with other private sector organizations to assess the broader implications of the provision and will issue a joint statement voicing their collective opposition.

Finally, on June 24, a mass SMS campaign will target key lawmakers, including the Speaker of the House and chief whips of major political parties, pressing them to push for the policy’s reversal.

According to IPPAN’s Acting President Mohan Kumar Dangi, these actions are aimed at alerting political leadership and policymakers to the long-term risks of discouraging private investment in Nepal’s energy sector through an unviable procurement framework.

People’s News Monitoring Service