Kathmandu, January 12

The Ministry of Federal Affairs and Local Development has issued a circular to all local levels, requesting them to obtain technical clearance from the Department of Electricity Development with respect of issuance of licence to hydro-electricity projects.

The constitution has conferred the power to develop hydro-electricity projects on all three levels of government — federal, provincial and local. As per the Local Government Operation Act, 2017, licence for any power project with installed capacity of up to one megawatt shall be issued by the concerned local levels. Earlier, the DoED was the sole authority to issue electricity generation licence.

“The local levels have been told to maintain coordination with and obtain technical clearance from the DoED before issuing licence for the development of hydro-electricity project with installed capacity of up to one megawatt until formulation of policies, standards, law and procedures related to electricity generation by the local governments,” read the circular issued by the MoFALD.

A decision to this effect was taken by the ministry on Wednesday, it informed. “If the local levels issue electricity generation licence without obtaining technical clearance from the DoED, there can be duplication as they don’t have records of companies that have already obtained licence or are in the process of obtaining it from the DoED,” the circular says.

The provision of granting the power to issue electricity generation licence to local levels aims to make maximum utilisation of water resources, determine their hydropower capacity and expand electrification across the country to expedite development activities.