Power producers ask to increase PPA rate for 27 hydel projects

The power producers have asked the government to walk the talk.

Meeting with the finance minister Shankar Prasad Koirala at his office today, representatives of the Independent Power Producers Association of Nepal (IPPAN) asked to implement the amended agreement between the government and power producers to reduce risk of power projects that have already done Power Purchase Agreement (PPA) and are under construction.

According to the latest agreement, the PPA rate has been revised to Rs 8.40 per unit in the dry season and Rs 4.40 per unit in rainy season.

Some 27 hydropower projects currently under construction have been incurring the loss due to price hike of the construction materials and machinery equipments, they said, asking the government to hike the PPA rate also.

The government had agreed to hike their PPA rate, but not implemented yet, they added.

Likewise, they also asked the government to provide at least Rs 200 million in six per cent interest – per megawatt (MW) – for at least 10 years.

The government is ready to help solve the problems of energy sector as it is a priority sector also, the finance minister told them, on the occasion.

The budget for the current fiscal year has promised to end the load-shedding in three years, he said, asking the power producers' help to end the load-shedding.

The minister, who was once energy secretary also, said that the Finance Ministry has for the first time overstepped in the jurisdiction of Energy Ministry and fixed the term for making the country energy surplus.

The government that has been taking responsibility of the billions of losses of Nepal Electricity Authority (NEA) is serious on increased investment in hydropower, said finance secretary Shanta Raj Suibedi, on the occasion.

Likewise, joint secretaries Rajan Khanal and Baikuntha Aryal suggested the power producers to take advantage of the government's incentives.

The power producers on the occasion, asked to clarify the revenue confusion, though the government has prioritised the energy.