IPPAN demands relief for flood-hit hydro projects

By A Staff Reporter,Kathmandu, Oct. 10: The Independent Power Producers' Association, Nepal (IPPAN), has called on the government to immediately introduce relief package to support the reconstruction of hydropower projects severely impacted by recent floods.

Meeting with Minister for Energy, Water Resources and Irrigation Minister Kul Man Ghising on Wednesday, IPPAN President Ganesh Karki said that the government should announce a relief package for the reconstruction of flood-damaged hydropower projects.

Karki said that a relief package should be brought by the government considering all the projects damaged by the recent floods on October 4 and 5 and previous year's floods as well.

The IPPAN proposed that the package should address various key issues, including the extension of Required Commercial Operation Date (RCOD) and license periods, loan rescheduling, long-term financing, and customs duty waivers on essential equipment. 

It demanded that the government make arrangements for the import of machinery and equipment required for the reconstruction and maintenance of flood-affected projects at 1 per cent customs duty and extend the RCOD period for under-construction projects damaged by the flood by three years and the license period by five years.

The IPPAN has demanded that the system that automatically converts to a Take and Pay PPA if electricity is not produced within the fiscal year 2025/26 to 2027/28 be abolished.

President Karki said multiple rounds of flooding since June 2023 had caused severe damage to both operating and under-construction hydropower projects, requiring urgent policy intervention.

During the meeting, Minister Ghising said that he would take initiative to provide all possible relief to the flood-affected projects. He also informed that he would present the issues related to forest-related energy projects in the upcoming cabinet meeting to resolve them.

Due to floods and landslides caused by heavy rains on October 3-5, 20 hydropower projects in operation have been affected, of which 17 hydropower projects with a capacity of 135 MW have been completely shut down. Three projects with a capacity of 156 MW have been partially affected. 

Similarly, 17 under construction hydropower projects with a capacity of 520 MW have been affected by the floods.