May 31: The government has remained silent on the issue of giving VAT exemption and subsidies to the promoters of hydro power projects. The government has not allocated any amount in this regard in the budget for the upcoming fiscal year which was announced on Saturday, May 29.

In 2015, the government had announced to provide Rs 5 million grant on VAT per megawatt to the promoter companies of power projects to be completed within a decade by issuing a concept paper on National Energy Crisis Mitigation and Power Development Decade. In addition, it was said that the projects completed by 2015 would also receive the grant.

The government has already unveiled five budgets after announcing the grant. However, the promoters say that none of the budgets has addressed the issue.

Chairman of Independent Power Producers Association of Nepal (IPPAN) Krishna Prasad Acharya said that it was unfortunate that the grant was not implemented even after the announcement.

“The government has already decided to subsidize VAT for power projects. The required amount has to be allocated through the budget. However, even after 5-6 years, this issue has not found a place in the budget. We will not remain silent in this regard. We will continue our initiative for this,” he said.

Spokesperson for the Ministry of Energy Madhu Prasad Bhetwal said that the Ministry of Finance is the body to take a necessary decision in this regard. “At that time, we had offered a grant of Rs 10 million. The finance ministry reduced it to Rs 5 million,” he said, adding, “We have not been able to understand why the implementation has been delayed.”

Secretary at the Ministry of Finance Shishir Kumar Dhungana also admitted that the budget could not address the issue. He said that this time the issue could not be addressed because it did not fall in priority list and there were other pressing issues.

“The coronavirus pandemic and its impact grabbed our attention while preparing budget. Therefore, this issue could not be addressed in the current budget,” he said, “However, it is an issue that the government has already decided. We will make necessary arrangements and implement them.”

The government had announced such a concessional package to private sector promoters in 2015 intending to encourage power generation during the time of load-shedding. The government had made public a 99-point concept paper on energy crisis mitigation. However, the failure to implement it has discouraged energy producers of the private sector.

The government had announced a grant of Rs 5 million per megawatt to the promoter companies of the project to be completed by 2026. They also said that a grant of Rs 5.5 million per megawatt would be given if the construction is completed by 2024.

Many projects have been completed even after the government announced the exemption. However, IPPAN chairman Acharya said that they have not received the facility announced by the government. He stressed the need to implement the government's declaration as soon as possible.