HIMALAYAN NEWS SERVICE
KATHMANDU: The Ministry of Energy has decided to increase the power purchase rate for seven hydro projects that are under construction.
A minister level decision was made for seven small projects that are under construction as per the Subsidies for Private Constructed Hydroprojects Procedure 2011, which will allow the government to increase the power purchase agreement by 20 per cent at the existing rate.
As of present, Nepal Electricity Authority buys electricity from private developers at the rate of Rs 4 per unit in summer and Rs 7 per unit in winter.
After the increment comes into effect the purchase rate will be Rs 4.80 per unit in summer and Rs 8.40 per unit in winter.
The ministry said this will encourage developers to complete the projects on time. The ministry also decided to provide a loan of Rs 20 million per megawatt of electricity for seven projects namely—United Modi(9.9 MW), Aankhu Khola 1 (8.4 MW), Lower Indrawati Khola(4.5 MW), Bijayapur Khola (1.4 MW), Jirikhola (2.2 MW), Middle Chaku (1.8 MW) and Lower Chaku (1.76 MW).
“The government will provide the fund to NEA, which in turn will provide the subsidy at low interest rate to developers,” the decision mentioned.
The loan payback period for projects is seven years from the date of commercial operation.
Energy minister in the previous Jhala Nath Khanal-led government Gokarna Bista had prepared the subsidy procedure, which incumbent minister Posta Bahadur Bogati took up and based the decision on the procedure prepared last year.
The ministry had prepared the procedure after national private developers repeatedly demanded that their burden be eased as the interest rate for the loan from banks had soared and the pressure on them had increased so much as to make their projects unfeasible at the power purchase rate that had been signed.
The minister level meeting endorsed the proposal
prepared by the Subsidy Committee Recommendation for Private Developer,s which evaluated the progress of projects report, date of commercial operation and financial management.