IPPAN tells govt to announce relief package for flood-hit hydropower projects

KATHMANDU: The Independent Power Producers’ Association, Nepal (IPPAN) has urged the government to announce a comprehensive relief package for hydropower projects damaged by recent floods and landslides.

During a meeting with Energy, Water Resources and Irrigation Minister Kulman Ghising on Wednesday, IPPAN President Ganesh Karki said the government must come forward with a targeted package to support the reconstruction and recovery of affected projects.

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

Minister Ghising assured the delegation that the government would do its best to provide relief to the affected developers. He also said he would take up hydropower-related forestry issues in the upcoming Cabinet meeting to expedite solutions.

According to the ministry, the heavy rains between October 3 and 5 disrupted 20 operating hydropower plants, completely halting production at 17 projects with a combined capacity of 135 MW and partially affecting three others totaling 156 MW. Likewise, 17 under-construction projects with a total capacity of 520 MW suffered varying degrees of damage.

In its proposal to the minister, IPPAN put forward the following major demands:

1. Allow the import of reconstruction and maintenance machinery for flood-damaged projects at 1% customs duty.
2. Extend the RCOD deadline by three years and project license period by five years for under-construction projects.
3. Introduce loan rescheduling and refinancing mechanisms for affected developers.
4. Expedite the IPO and rights share issuance process for impacted companies.
5. Declare flood-affected hydropower projects as crisis-hit and introduce supportive policy decisions.
6. Ensure access to long-term financing for reconstruction and rehabilitation.
7. Revoke the provision under which non-operational projects by 2027–2028 are automatically converted into Take-and-Pay PPAs.

Karki said that without immediate policy support, many private energy producers could face insolvency, posing risks to Nepal’s broader hydropower expansion goals.