Kathmandu. The Nepal Electricity Authority (NEA) has started the process of extending the deadline for the commencement of commercial production of hydropower projects that have been in various stages of construction but are yet to come into commercial production on time.

For this, the Authority has implemented a policy to classify the projects into four groups on the basis of clear criteria for the first time.

A meeting of the Board of Directors of Nepal Electricity Authority (NEA) held on June 14 had decided to categorize the project into four groups—A, B, C, and D—based on the physical progress of the project, implementation of the obligations under the PPA and the status of RCOD. In the first phase, the process of adding RCOD to the projects in group ‘A’ and ‘B’ has been initiated.

Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha on Wednesday said that the government was going to add RCOD to facilitate the under-construction projects, not to trouble the private sector. He added that the Ministry was committed to develop a system that such decision would be taken through an institutional system and not as per the wishes of any particular person.

Minister Shrestha said that the government was sensitive towards the self-esteem of private sector and investment security, urging the promoters to fulfill their responsibilities on time. He was of the view that the energy sector would pick up the expected momentum only when there is mutual accountability between the government and private sector.

According to NEA, 320 hydropower projects with a capacity of 8,292 megawatts are under construction. There are 150 projects with a capacity of 4,491 MW in Group ‘A’ and 68 projects with a capacity of 1,420 MW in Group ‘B’. The rest of the projects are categorised as Group ‘C’ and ‘D’.

On the occasion, IPPAN senior vice-president Uttam Blon said that RCOD should be added to all projects with certain conditions on the basis of the principle of natural justice. He urged all projects to be given equal opportunity on the basis of the commitment to complete the PPA within a year and then start the construction within 6 months.

According to the criteria prepared by the NEA, the projects that have not completed the RCOD period and have fulfilled the obligations mentioned in the PPA including production license, financial management, land management or are due to be completed as per the agreement.

Likewise, the projects that have not been able to come into operation due to delay in the construction of transmission line or substation are in Group ‘B’, the projects that have been affected due to the situation out of control and have received approval to add RCOD with necessary evidences and the projects that have achieved at least 25 percent physical progress till the end of the RCOD period.

Similarly, projects that have not fulfilled basic obligations such as production license, financial management or land management or less than 25 percent physical progress will be placed in group ‘C’ even if RCOD is not available.

Group ‘D’ includes projects that have not fulfilled mandatory obligations such as production license, financial management and land management even after the completion of RCOD or have revoked the survey and production license.

The NRA has made the work procedure of 2071 BS based on the measurement of physical progress. Accordingly, the construction of headworks, tunnel, pipeline, powerhouse and other major structures will be considered as physical progress. In the case of solar projects, the panel purchase agreement, opening of LC, completion of land management and starting of construction of mounting structure and foundation will also be accepted as an indicator of progress.

The projects listed in group ‘B’ will be monitored regularly. The Department of Power Trade will give necessary directives to complete the construction on time and will also monitor the implementation of the directive. As per the need, the project can be reclassified within six months.

Likewise, ‘Notice of Default’ will be issued to the projects which are in Group ‘C’ as per the PPA. If there is no satisfactory improvement or response even after that, the process of canceling the agreement will be initiated, the authority said.