The government is going to implement its incentive scheme for the hydropower developers.
The then government through the fiscal budget of 2014-15 had announced to extend incentive worth Rs 5 million per megawatt (MW) to the developers of generation projects that start commercial operation by 2022-23. However, due to the delay by the Finance Ministry in providing its consent to the Energy Ministry to implement this decision, the announcement had been stalled for long.
The Independent Power Producers (IPPs) had long been lobbying with the government for the prompt execution of the facility following the announcement made by the budget.
The Finance Ministry had delayed in bringing this provision into force for quite some time as the country’s economy was shattered by the earthquake and the months-long border blockade, which had affected revenue generation, according to Energy Ministry.
"The finance ministry has finally agreed to implement the incentive scheme that was announced for the private sector developers," it said, adding that Finance Ministry agreed to implement this provision looking at the momentum in power generation in the last one yea.
The private sector developers contributed 105 megawatts of electricity to the national grid in 2016.
The Energy Ministry has also included provision of incentive in the ‘Energy Crisis Prevention and Electricity Development Decade’ – a vision document of the government to harness 10,000 megawatts of electricity in 10 years – and sought consent from Finance Ministry to execute incentive package announced by the fiscal act.
“Though, it took quite a long time to obtain the consent of the Finance Ministry, we will soon execute this package through a guideline that needs to be approved by the Cabinet," joint spokesperson for Energy Ministry Gokarna Raj Pantha said.
"After the guideline is endorsed from Parliament developers can submit their applications with the evidence of project completion within the aforementioned period to avail the facility," he said, adding that the ‘Energy Crisis Prevention and Electricity Development Decade’ launched last year has also mentioned about extending the incentive for 10 years, which means it would have been in effect till fiscal 2024-25. "But the Finance Ministry has clearly said that the facility will be extended to projects that are completed in between 2014-15 and 2022-23."
The IPPAN – umbrella association of the private sector hydropower developers in the country – has said that if the government had not delayed in implementing this announcement it would have been a lot better. "Though late, it will help motivative the private sector developers," president of IPPAN Shailendra Guragain said.
"As a large quantum of electricity from the independent power producers is going to be added within a few years, the project developers will benefit from this facility,” he said, adding that the power developers had sought exemption on value added tax (VAT) for the hydroelectricity projects to encourage developers so that the energy crisis could be addressed, but the fiscal budget 2014-15 addressed our demand in a different way.
As the government has announced the incentive, it will more or less be equivalent to exemption of the VAT amount.
The then government through the fiscal budget of 2014-15 had announced to extend incentive worth Rs 5 million per megawatt (MW) to the developers of generation projects that start commercial operation by 2022-23. However, due to the delay by the Finance Ministry in providing its consent to the Energy Ministry to implement this decision, the announcement had been stalled for long.
The Independent Power Producers (IPPs) had long been lobbying with the government for the prompt execution of the facility following the announcement made by the budget.
The Finance Ministry had delayed in bringing this provision into force for quite some time as the country’s economy was shattered by the earthquake and the months-long border blockade, which had affected revenue generation, according to Energy Ministry.
"The finance ministry has finally agreed to implement the incentive scheme that was announced for the private sector developers," it said, adding that Finance Ministry agreed to implement this provision looking at the momentum in power generation in the last one yea.
The private sector developers contributed 105 megawatts of electricity to the national grid in 2016.
The Energy Ministry has also included provision of incentive in the ‘Energy Crisis Prevention and Electricity Development Decade’ – a vision document of the government to harness 10,000 megawatts of electricity in 10 years – and sought consent from Finance Ministry to execute incentive package announced by the fiscal act.
“Though, it took quite a long time to obtain the consent of the Finance Ministry, we will soon execute this package through a guideline that needs to be approved by the Cabinet," joint spokesperson for Energy Ministry Gokarna Raj Pantha said.
"After the guideline is endorsed from Parliament developers can submit their applications with the evidence of project completion within the aforementioned period to avail the facility," he said, adding that the ‘Energy Crisis Prevention and Electricity Development Decade’ launched last year has also mentioned about extending the incentive for 10 years, which means it would have been in effect till fiscal 2024-25. "But the Finance Ministry has clearly said that the facility will be extended to projects that are completed in between 2014-15 and 2022-23."
The IPPAN – umbrella association of the private sector hydropower developers in the country – has said that if the government had not delayed in implementing this announcement it would have been a lot better. "Though late, it will help motivative the private sector developers," president of IPPAN Shailendra Guragain said.
"As a large quantum of electricity from the independent power producers is going to be added within a few years, the project developers will benefit from this facility,” he said, adding that the power developers had sought exemption on value added tax (VAT) for the hydroelectricity projects to encourage developers so that the energy crisis could be addressed, but the fiscal budget 2014-15 addressed our demand in a different way.
As the government has announced the incentive, it will more or less be equivalent to exemption of the VAT amount.
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