Private Sector Faces Challenges Amid Government and Authority Delays in PPAs
The Nepal Electricity Authority (NEA) had requested 54 hydropower projects to submit details within four days, yet even after 14 months, Power Purchase Agreements (PPAs) have not been finalized. Prakashchandra Dulal, Vice President of the Independent Energy Producers Association Nepal, criticized the government and authority’s irresponsible attitude, which has caused difficulties for private investors. NEA board member Anshu Kiran Shahi explained that delays are due to ongoing consultations with the Ministry of Finance regarding PPAs for projects under 10 megawatts. July 31, Kathmandu.
The Electricity Trading Department of NEA issued a notice on Jestha 25, 2082 BS (June 8, 2025), requesting various 54 hydropower projects to submit details within four days for PPA processing. NEA’s 994th board meeting had directed projects with completed connection agreements to provide the necessary documents for PPA within this timeframe. Despite companies submitting the details, the NEA has been pursuing urgent submissions via correspondence, yet the PPAs remain incomplete after 14 months.
The government had announced the “Energy Consumption Growth and Export Strategy 2083,” committing to complete the PPA and licensing process within 180 days; however, implementation remains significantly behind schedule. According to Dulal, four of their projects — Stern Energy Pvt. Ltd., Prakash Solution Pvt. Ltd. (Superpalu Hydropower), Snowfall, and Fresh Water — are stranded awaiting PPAs. NEA had set guidelines on Chaitra 12, 2081 BS (March 26, 2025), and board decisions on Baisakh 31, 2082 BS (May 14, 2025), to prioritize PPA processing under non-overloading condition and N-1 contingency standards.
Dulal stated, “We face a four-day deadline, but the NEA shows no concern for 15 months. This irresponsible approach by the government and NEA has greatly troubled private investors.” He noted efforts to finalize PPAs during former NEA Executive Director Kulman Ghising’s tenure were made, but procedures stalled when the NEA sought opinions from the Ministry of Finance. On Poush 24, 2082 BS (January 8, 2026), the Ministry of Finance agreed via ministerial decision to propose to the Cabinet that projects waiting for extended periods be contracted on a “take and pay” basis.
Dulal further added, “Kulmanji made significant efforts and secured decisions from the Ministry of Finance, but the Ministry of Energy stalled progress by debating the ‘take and pay’ mechanism. After the elections and Kulmanji’s departure from the NEA, this matter was sidelined again.”
The NEA has requested production permits, financial arrangements, environmental assessments, and construction progress reports; investors have already incurred significant expenses fulfilling these demands. Dulal raised concerns, “If the generation license is held for two to three years without a PPA, what will become of those projects? After investing millions to hundreds of millions in documentation, if PPAs are halted, who will take responsibility for the problems faced by these investors in the future?”