Finance Minister Bishnu Paudel’s failure to signal any revision of the “Take and Pay” Power Purchase Agreement (PPA) provision in the upcoming fiscal year 2082/83 budget has prompted energy entrepreneurs to announce a series of protests.
The Independent Power Producers’ Association, Nepal (IPPAN) has launched a phased protest program demanding the amendment of the budgetary provision that mandates “Run-of-River projects will be awarded PPAs on a Take and Pay basis.” IPPAN argues that this provision is detrimental to the private sector, which currently contributes 80% of Nepal’s total electricity generation capacity of 3,600 megawatts.
Under the Take and Pay system, banks are reluctant to finance power projects due to revenue uncertainty. IPPAN warns that approximately NPR 66 billion invested in over 350 projects — amounting to a potential generation capacity of 17,000 megawatts — is at risk of being lost if the provision remains unchanged.
According to IPPAN, a memorandum will be submitted to the Prime Minister, Energy Minister, and Finance Minister on Ashar 6 (June 20). On Ashar 7 (June 21), SMS messages will be sent to the same officials and the Nepal Electricity Authority’s Executive Director, urging them to withdraw the Take and Pay policy. On Ashar 8 (June 22), messages opposing the PPA provision will be shared across social media.
Similarly, on Ashar 9 (June 23), discussions will be held with various private sector associations to develop a unified stance. On Ashar 10 (June 24), IPPAN plans to collectively send SMS messages to the Speaker of the House of Representatives and parliamentary whips, urging the retraction of the Take and Pay provision, according to IPPAN’s Acting President Mohan Kumar Dangi.
