NEA to guarantee power purchase from independent producers

Published On: December 13, 2018 02:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 13: A board meeting of Nepal Electricity Authority (NEA) has decided to lift 'take and pay' provision in the power purchase agreements (PPAs) signed with independent power producers.

The NEA's board meeting led by Minister for Energy, Water Resource and Irrigation Barshman Pun on Tuesday decided to guarantee purchase of the electricity or sign PPA in 'take or pay' modality by ending policy of purchasing electricity only when there was a demand for power.

The independent power producers were long lobbying to ensure guarantee of electricity purchase in order to make the projects feasible and bankable.

Minister Pun directed the NEA management to revise the provision considering the generation target of 15,000 MW in ten years as per the government's white paper issued in April.

The NEA can now sign such 'take or pay' PPA until the installed capacity of run-of-river projects reaches 5,250 MW. The NEA has already signed PPA for installed capacity of 3,600 MW of such projects.

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