Kathmandu. The Nepal Electricity Authority (NEA) has extended the date for commercial commencement of commercial production of 27 hydropower projects with a capacity of 540.47 MW in the first phase.

NEA has added RCOD after assessing the actual condition of the projects that have already signed the Power Purchase Agreement (PPA) but have not been able to complete the projects within the stipulated time.

Earlier, Minister Shrestha had held a group discussion with the hydropower promoters and said that the government’s policy was to facilitate the genuine investors. The NEA had categorized a total of 218 projects into four groups – ‘A’, ‘B’, ‘C’ and ‘D’ on the basis of the physical progress of the project, the status of RCOD and the obligations to be fulfilled by the promoters as per the PPA. On the basis of this, the process of adding RCOD to the ‘A’ and ‘B’ group projects that have submitted the necessary documents and evidence has been initiated.

A meeting of the Board of Directors of the NEA held on June 16 had decided for the first time to classify the projects with clear criteria. Group ‘A’ includes projects that have fulfilled the necessary basic obligations and those projects that have achieved at least 25 percent physical progress due to the NEA.

Minister Shrestha said that the government has adopted a policy of facilitating the projects that are actually being constructed and not to trouble the private sector. He said that the government is committed to developing a system that will be taken on the basis of clear criteria and institutional system and not on the wishes of individuals.

Stating that the government is sensitive towards the investment security and self-respect of the private sector, Minister Shrestha stressed that the promoters should also fulfill their responsibilities on time. He said that the development of the energy sector will gain momentum only if there is mutual responsibility between the government and the private sector.

According to the NEA, 320 hydropower projects with a capacity of 8,292 MW are under various stages of construction. Of these, 150 projects with a capacity of 4,491 MW are in Group A and 68 projects with a capacity of 1,420 MW are in Group B. The remaining projects are classified as Group C and D. Group C consists of projects that have not completed the required generation license, financial management or land management and have made less than 25 percent physical progress till the completion of RCOD. Group ‘D’ includes projects that have not fulfilled mandatory obligations or have revoked survey and production licenses.

The projects in the ‘B’ group will be monitored regularly. The electricity trade department of the NEA will give necessary instructions for the timely completion of the project and monitor its implementation. If necessary, the project can be reclassified within a maximum of six months. This provision has laid the foundation for facilitating private sector investment and maintaining more accountability in the construction of the project by distinguishing the difference between the projects that are under construction due to real reasons and those that have not been able to make progress for a long time.