PPAs of companies which do not generate electricity will be canceled: Minister Bhusal

Published On: July 31, 2022 05:15 PM NPT By: Republica  | @RepublicaNepal


KATHMANDU, July 31: Energy, Water Resources and Irrigation Minister Pampha Bhusal has said that the power purchase agreements (PPAs) of companies that do not produce electricity after obtaining a license to generate electricity will be canceled.

Saying that the PPAs of hydroelectric power projects worth 1,600 megawatts have been signed with the government under the ‘take and pay’ provision but there is no construction work, Minister Bhusal said the government would cancel such PPAs.

The ministry is in favor of encouraging real power-generation companies and canceling the PPAs with those who do not work according to the PPA. Minister Bhusal said that, since the power purchase agreement is based on ‘take and pay’, if the generated electricity cannot be sold, the financial risk will increase to a large extent.

She said that it is necessary to evaluate and analyze both Nepal's power transmission lines and market risk. Minister Bhusal said that hydropower projects worth about 3,200 megawatts with which the Nepal Electricity Authority has signed PPAs are under construction.

Minister Bhusal said that she is preparing to submit and pass the new Electricity Act in this session of the House of Representatives. She said that the new Electricity Act has been widely discussed in the National Assembly. Minister Bhusal also said that she is thinking of submitting the Electricity Act only if there is a guarantee that it will be passed by the House of Representatives.


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