The government has finally decided to deal with a problem the previous governments had ignored for too long. By forming a high-level committee to review and streamline the Power Purchase Agreement (PPA) process, it has signaled that it understands how badly things have stalled. For years, private developers have waited and files gathering dust while projects that could power the country sat frozen in paperwork. Delays, vague procedures, and shifting rules have not just frustrated investors, they have held back the entire energy sector. This new panel, led by Joint Secretary Rajan Bhattarai at the Ministry of Energy, will examine how PPAs are handled by the Nepal Electricity Authority. The committee has been asked to find where the system has broken down- whether in policy, law, financing, or basic administration. The panel is expected to suggest fixes that actually work. It is a simple mandate on paper. In practice, it cuts into years of indecision and institutional hesitation. The urgency is indeed high as projects worth around 13,000 megawatts are stuck in limbo, even though developers have already applied for PPAs. That is not a small delay but a backlog that has so far reflected deeper disagreements, especially over the “take or pay” and “take and pay” models.
How sustainable is hydropower development in Nepal?
Policymakers worry about financial risks in lack of such a process. Developers want certainty before they commit capital. Somewhere in between, progress has stalled. The result is a system that satisfies no one. The government has tried to ease some of that tension. It recently introduced new PPA rates for reservoir-based hydropower projects, setting seasonal price caps for projects up to 100 megawatts while allowing larger ones to be priced based on actual costs. This move shows a degree of flexibility that has often been missing. It also hints at a broader realization that a one-size-fits-all approach does not work in a sector as complex as hydropower. At the same time, another committee led by Joint Secretary Mohan Shakya is reviewing the status of power development permits. That process has its own history of delays and confusion. Fixing PPAs without fixing permits would be like clearing one lane of a blocked road while leaving the rest jammed. Both need attention if the system is to move.
Step back, and the bigger picture becomes uncomfortable. Nepal has no shortage of rivers or ambition. What it lacks is a system that moves with purpose. Procedures drag on. Decisions get tangled in politics. Rules shift just enough to keep investors guessing. The private sector hesitates, and the NEA struggles to expand without taking on too much risk. The result is a sector that promises a lot but delivers less than it should. Forming committees is the easy part. Acting on what they find is where things usually fall apart. This time cannot follow that pattern. The government needs to set clear timelines, track applications in a way that everyone can see, and create a single, reliable channel for developers to deal with. Visiting different departments and offices to get things done helps no one. Nepal does not need more promises about its hydropower future but a defining action and decisions that stick for good. If these panels lead to a system that is predictable, transparent, and fair, investment will flow into the sector. Then projects will move and power will flow across the nation and region. To achieve this, the first step, the formation of the PPA body, is finally in place. Let us hope that something will come out with the formation of this panel.
