The Nepal Electrical Authority (NEA) signed Power Purchase Agreements (PPA) in the first five months of the current fiscal year with 52 hydropower projects!
As per the NEA Spokesperson Prabal Adhikari, the total capacity of the projects is 1,051 MW.
All the projects have private sector investments and their promoters were urged to complete the fiscal management soon.
Among the companies that signed the deal with NEA, Arati Hydro Power Company had signed the agreement on the very first day of the current fiscal and has also acquired the generation license for the 14 MW Upper Irkhuwa Hydropower Project in Bhojpur district.
Likewise, NEA signed the purchase agreement for 12 MW Dudhukunda Khola hydropower project in Sankhuwasabha and the 1.5 MW upper Gadigadh Project.
It will also be signing a PPA for 12 additional projects totaling to 70 MW capacity in future.
The Nepal Government aims to generate 15,000 MW power by the next 10 years making Nepal a self-sufficient country in terms of power production.
NEA Opts for Take-or-Pay Modality
Meanwhile, a long dispute between Nepal’s Energy Ministry and Nepal Electrical Authority was put to rest on December 11, 2018 after the latter agreed to sign PPAs with run-of-the-river hydro projects under the take-‘or’-pay modality, until their combined installed capacity is at 5,250 MW.
According to an important source from the authority, the Board of Directors of NEA decided to convert all the take-‘and’-pay projects into take-‘or’-pay modality. This also includes signing future pacts under the same.
It also allows NEA to buy and pay for energy from hydro projects as and when needed. As per the new system, it has to buy the required amount of electricity or pay a fine if it fails to do so.
Currently, NEA still has a combined installed capacity of 1,247 MW in the take-‘and’-pay-format.
Initially, the electrical authority was hesitant to adopt the take-‘or’-pay modality. However, the board meeting chaired by Energy Minister Barsha Man Pun took this decision.
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