The Independent Power Producers’ Association Nepal (IPPAN) has praised former Prime Minister Sher Bahadur Deuba for his significant role in Nepal’s energy sector. IPPAN honored Deuba during its 23rd annual celebration for his contributions.
The government’s plan in the upcoming fiscal year’s budget to limit private sector participation in the electricity purchase and sale mechanism known as “take-and-pay” sparked opposition from business groups. Following the backlash, the government committed to withdrawing this policy.
IPPAN President Ganesh Karki said the decision has encouraged private energy producers. He highlighted Congress President Deuba’s key role and urged all attendees to stand and applaud in his honor.
Under the Electricity Act of 1992 (2049 BS), private sector participation in electricity purchase and sale began in 1998 (2055 BS). Over 26 years, the private sector has generated approximately 2,923 megawatts (MW) of electricity. This contribution has increased Nepal’s total energy production capacity from 252 MW to 3,625 MW, with the private sector accounting for about 81 percent.
Currently, more than 4,200 MW of projects are under construction. To date, 11,421 MW of power purchase agreements (PPAs) have been signed between the Nepal Electricity Authority and the private sector. Additionally, 4,966 MW of hydropower and 960 MW of solar projects are in the process of finalizing PPAs.
President Karki noted that delays in IPO issuance, complexities in electricity trading license approvals, and lack of transmission infrastructure have discouraged the private sector. However, by the next fiscal year, total capacity under electricity purchase agreements between the private sector and Nepal Electricity Authority is expected to reach 17,347 MW.
The private sector has thus made a significant contribution to Nepal’s energy production and is entering a new phase of development through cooperation with the government.
