Sunday, 1st March 2015

NEA instructs developers to complete PPA-signed projects

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The Nepal Electricity Authority (NEA) has reached power purchase agreements (PPAs) with 73 hydel projects so far.

Such an agreement was first reached with Khimti Hydel project in the private sector. Although NEA reached PPA with good intention of resolving energy crisis of the country, most of the projects have not been completed so far.

NEA Business Section Chief Hitendra Dev Shakya said projects of 1023 mw capacity are under construction so far.

Some 37 projects are under construction, said Shakya adding that, if they are completed, energy crisis will at once be resolved.

In hydro power history of Nepal, the most negative examples of PPA were mistakes in Khimti and Bhotekoshi Project and NEA is incurring losses from them.

Voice has been raised not to reach PPA as there was loss each year due to PPA in dollars.  Energy Minister Radha Gyawali has also said they will be reviewed.

NEA incurs losses of Rs. one billion due to these projects annually.  There are 79 projects that have applied for PPA but the NEA has not decided on them but is preparing to take a decision.

Stakeholders in the country have been urging not to sign PPA in dollars, and Energy Ministry is also against it, not to repeat the mistakes in Khimti and Bhotekoshi.

Some of the PPA projects which are under construction are Lower Indrawati, Jiri Khola, Pilwa Khola, Maikhola, Upper Tamakoshi, Belkhu, and Mailung Khola, among others.

The NEA has reached PPA with small and medium scale projects at Rs. 4.8 in summer and Rs. 8.8 in winter and in some projects, 55 percent is in dollars and 45 percent in Nepali currency in projects to be constructed with some foreign investment.

NEA says projects which do not start construction after signing PPA will not be spared.  It has already canceled PPA with nine hydel projects which did not start works in time.  NEA has also urged projects with PPA to complete construction in time.