Kathmandu. Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha has called a meeting of stakeholders to extend the deadline of RCOD.

The meeting will take place at 3:00 pm at the Nepal Electricity Authority (NEA). Nepal Electricity Authority (NEA) manages

Directors, office-bearers and representatives of hydropower projects will participate.

Anshu Shahi, member of the board of directors of NEA, said that among the 70 companies that are in the RCOD phase, priority companies have been invited.

What is RCOD?

According to Shahi, a member of the Board of Directors, RCOD is the deadline for commercial power generation (RCOD). Minister Shrestha has called the meeting to classify the power projects that have expired due to natural disasters and other reasons and extend their deadlines.

The government is preparing to extend the deadline by giving priority to the projects damaged by natural disasters, floods and landslides. Apart from this, the meeting will also decide what to do with the license and keep it in the pocket.

According to the Energy Ministry, the government has adopted a policy to categorize hydropower projects that are in different stages of construction but have not come into operation through Power Purchase Agreement (PPA) and facilitate them. Preparations have been made to extend the deadline for commercial power generation (RCOD) by classifying the existing condition of these projects. A meeting of the Board of Directors of Nepal Electricity Authority (NEA) held on June 16 had decided to categorize the projects into four groups based on the physical progress of the project and the implementation status of various obligations mentioned in the RCOD and PPA.

According to Energy Minister Shrestha, necessary facilitation would be made after evaluating the overall condition of such projects. The projects that have not completed the RCOD and have completed the obligations mentioned in the PPA including production license, financial management, land management on time or will be completed within the stipulated time as per the agreement will be in the first group.

Similarly, although RCOD has been terminated in Group ‘B’, the projects that have not been brought into operation as the NEA has not completed the construction of transmission line or substation for grid connection as per the agreement. There will be projects that meet the conditions set by the Board of Directors for adding RCOD to it.

Likewise, the projects approved by submitting an application with documents confirming that the construction of the project has been affected due to the situation outside the control mentioned in the PPA will also be listed within the RCOD period. Projects that have achieved more than 25 percent physical progress of the project will be included during the deadline.

Even if the RCOD has not been terminated in Group ‘C’, the projects that have not fulfilled the major obligations mentioned in the PPA, such as production license, financial management or land management on time, will be kept if the project has not completed its major obligations on time.

Group ‘D’ includes projects that have been subjected to obligations mentioned in the PPA even after the expiry of the RCOD period, such as acquisition of production license, financial management, failure to complete land management, survey and revocation of production license. The measurement of physical progress will be done as per the procedures set by the Authority.

The construction of major structures (such as headworks, pipe alignment, tunnel, powerhouse, etc.) will be considered as the basis of physical progress.

In the case of solar projects, the panel purchase agreement, opening of LC, completion of land management and commencement of construction of mounting structure and foundation will also be considered as indicators of progress.

The Department of Electricity Trade will alert the projects in Group ‘B’ to complete the construction works on time, and it can issue necessary directives. The Department of Trade will monitor whether or not the directives given by the Authority have been followed. In case of such projects, regular monitoring will be done giving a time-frame. Provision has been made to classify the next category as per the need within a maximum of 6 months.

Similarly, a ‘notice of default’ will be issued to the projects in group ‘C’ as per the PPA. If there is no satisfactory answer or improvement is not seen, the process of cancellation of the agreement will also be initiated. Similarly, 25 percent of the physical progress should be made as per the Physical Progress Procedure of the NRA, 2071.

The new system will make a clear distinction between projects that have been in limbo for a long time, projects that are progressing and projects that have been delayed in operation. It is also believed to help make the power project management more systematic, transparent and accountable.