Govt, foreign firms likely to get licence without competition

Kathmandu, September 22

The government is planning to award licences to construct hydropower projects to both government and foreign firms without them having to face any competition.

This provision has been included in the draft of the new Electricity Bill, which was made public by the Ministry of Energy, Water Resources and Irrigation (MoEWRI) on Sunday for further discussions. The ministry has sought feedback and suggestions within 15 days.

The MoEWRI has mentioned that government and foreign firms will not have to compete with others to get licence of any hydropower project they want to build.

As per the draft bill, if any company which has a licence at present to build a hydropower project is unable to construct the project then the government will scrap its project licence and award the licence to other government or foreign firms.

The proposed bill also has a provision that any project will have to take approval from Nepal Electricity Regulatory Commission (NERC) before signing power purchase agreement. Earlier, power developers used to sign power purchase agreement with Nepal Electricity Authority.

“The provision that the government can cancel the licence being held by private sector companies points to the fact that the government is focused on nationalising the hydropower projects being developed by the private sector,” said Shailendra Guragain, vice-president of Independent Power Producers’ Association – Nepal.

The private sector has raised its concerns and asked the government to remove such provision from the bill. Apparently, the private sector at present has received licences to build hydropower projects with total installed capacity of more than 18,000 megawatts.

Guragain further said that if the bill is passed without taking into consideration the concerns of the private sector then the licences awarded to the private sector could be scrapped by the government and the projects could be placed in the government’s project basket. “This literally means nationalisation of projects.”

At present, the PPA of several hydropower projects has been stalled since the last six months as the NERC has stated that the PPA will now have to be signed as per the new Electricity Bill.

Minister for Energy, Water Resources and Irrigation, Barsha Man Pun, has announced that this is not the final bill and there will be further discussions

before it is finalised. “This not the final bill,” he said. “We have released the draft bill for public debate and hope the concerned stakeholders will provide necessary feedback on the bill.”

Speaking at a programme organised by Nepal Forum of Environmental Journalists today in the capital, Pun also said that the government will finalise the proposed bill by addressing the concerns of the stakeholders. “I believe that the private developers and other stakeholders will take ownership of the bill.”