Kathmandu, November 26

Drawing the attention of the government to the immense crisis being faced by the energy sector of the country due to the unofficial economic blockade by India, stakeholders of the energy sector have demanded that the government amend the related policies for swift development of the sector.

In this regard, Energy Development Council (EDC) President Sujit Acharya had led a delegation that met Finance Minister Bishnu Prasad Paudel on Wednesday and submitted a 19-point memorandum related to ‘security of Nepal’s energy sector’, as per a press statement issued today.

EDC President Acharya said the government’s policies related to tax and customs need to be revisited for overall development of the energy sector. “The government needs to show flexibility in fixing customs and VAT rate, which are hindering the rapid development of energy sector,” he opined.

The Council has urged the government to reduce all forms of taxes on electric vehicles, induction cooking appliances and all energy related projects to 0.1 per cent. The Council believes that the government should provide financing facilities for the manufacture and sales of such electrical items and promote them as ‘assembled in Nepal’, the statement adds.

The Council has further said that all power purchase agreements (PPAs) on hydropower and energy projects should be based on ‘take or pay’ policy. Until now, Nepal Electricity Authority — the sole buyer of electricity produced by the private sector — has been inking PPA on the basis of ‘take and pay’, which entails the Authority to buy electricity only when it needs it. According to the Council, this policy has dissuaded the private sector players from investing in the hydropower sector.

Similarly, the EDC has also demanded that the government do away with the provision requiring hydropower projects generating up to 100 megawatts of electricity from having to conduct environmental impact assessment (EIA). “Such projects should only have to complete initial environmental examination (IEE).”

The Council has also asked for the government to announce PPA rate of reservoir-type projects and make provisions for the private sector to generate and supply electricity by fixing distribution rate.

Moreover, the EDC has said that the government should scrap the provisions that require the contract for expansion of transmission lines to be given to Nepali Army and also that one per cent of net profit to be given to the Ministry of Forest and Soil Conservation. It has also said that the rule that says the government should be compensated with land for using its land should be done away with.

EDC has also asserted the recommendations incorporated in the memorandum need to be adopted for successful implementation of Prime Minister KP Sharma Oli’s announcement.

Accepting the memorandum, Finance Minister Paudel assured he would do his best in implementing the suggestions put forth by the Council. “The issues raised by the Council are valid during this crisis and these recommendations will provide both immediate and long-term benefits to the energy sector,” the statement quoted Minister Paudel as saying.

EDC comprises of representatives from the government, private, non-governmental organisations and other organisations related to the energy sector.