IPPAN Seeks Relief Package for Flood-Hit Hydropower Projects

The Independent Power Producers’ Association of Nepal (IPPAN) has urged the government to introduce a comprehensive relief package for hydropower projects affected by recent floods and landslides.

At a recent meeting with Minister for Energy, Water Resources and Irrigation, Kulman Ghising, IPPAN representatives stressed the need for immediate government intervention to support the reconstruction of damaged projects and restore investor confidence.

According to a press release issued by the ministry, Minister Ghising assured that he would make every effort to provide maximum relief to the affected projects. He also said that he would raise issues concerning energy projects located in forest areas at the upcoming Cabinet meeting.

IPPAN Chair Ganesh Karki called for a relief package covering all projects damaged by natural disasters over the past three years — including the floods and landslides of June 15–16, 2023; June–August and September 27–28, 2024; and June–August and October 3–4, 2025.

The association has proposed measures such as extending the Required Commercial Operation Date (RCOD) and license validity, restructuring and refinancing project loans, offering long-term financing, and granting customs duty exemptions on imported machinery and equipment required for reconstruction.

Among its specific demands, IPPAN has urged the government to allow the import of machinery and equipment necessary for reconstruction and maintenance of flood-damaged projects at a concessional customs duty rate of one percent. It has also sought a three-year extension of the RCOD for under-construction projects affected by floods, along with a five-year extension of permit validity.

IPPAN further demanded provisions for restructuring and refinancing the loans of affected developers and for fast-tracking the approval process of initial public offerings (IPOs) and rights share issues of the concerned projects. The association has also called on the government to declare hydropower projects damaged by natural disasters as “crisis-ridden” to enable necessary policy decisions and financial support.

In addition, IPPAN emphasized the need for long-term financing arrangements to support recovery and reconstruction efforts. It also asked the government to abolish the existing provision that automatically converts power purchase agreements (PPAs) into the “take and pay” model if power generation does not commence within fiscal years 2025/26–2027/28.

Minister Ghising reaffirmed the government’s commitment to supporting the private sector’s role in the energy sector and said discussions with concerned ministries and financial institutions would be initiated to address IPPAN’s concerns. -- RSS