Hydropower PPAs Remain in Limbo: 12,000 MW Projects Await Approval as Nepal Electricity Authority Stays Silent

Executive Director of the Nepal Electricity Authority, Hitendra Dev Shakya, has failed to take concrete steps to reopen Power Purchase Agreements (PPAs) for hydropower projects. Even after nearly two and a half months since his reinstatement by the Supreme Court of Nepal, no significant progress has been made.

Around 12,000 megawatts of hydropower projects are currently awaiting PPA approval. However, many projects have not received permission despite submitting applications long ago. The dispute over the “Take and Pay” provision introduced in the FY 2082/83 budget remains unresolved, discouraging private investors and financial institutions.

Previously, the government led by former Prime Minister KP Sharma Oli decided to revise the provision to “Take or Pay.” However, the decision was not implemented following political changes. Later, efforts were also made during the tenure of former Energy Minister Kulman Ghising and former executive director Manoj Silwal, but without concrete results.

The prolonged delay in PPA approvals has angered the private sector. According to Independent Power Producers’ Association, Nepal President Ganesh Karki, investment in hydropower projects has become increasingly risky. Officials state that due to the interim nature of the current government, major policy decisions are being postponed, and the matter is likely to be addressed by the next elected government.