Prime Minister KP Sharma Oli and Congress leader Sher Bahadur Deuba have agreed to remove the ‘Take and Pay’ provision related to the power purchase agreement (PPA) from the budget. Following discussions held in the Prime Minister’s chamber in Parliament, Finance Minister Bishnu Poudel will inform the Parliament about removing this provision, and the formal approval will be given by the Cabinet. Deuba had previously called Prime Minister Oli and Finance Minister Poudel to request the removal of the ‘Take and Pay’ clause.
The ‘Take and Pay’ policy has faced opposition from private energy promoters, parliamentarians, and ministers of the Energy Ministry. Critics argue that this provision will severely impact small and private hydropower projects. The Independent Power Producers’ Association Nepal (IPPAN) has declared a movement and has been continuously pressuring the government on this issue.
According to IPPAN, applications for PPAs have been submitted for projects totaling 12,889 megawatts, while the future of projects totaling 17,117 megawatts remains uncertain. IPPAN warns that if the ‘Take and Pay’ policy is implemented, banks and financial institutions will be unable to invest in these projects, risking the loss of investments exceeding Rs. 66 billion.
Expert’s express concerns that without clear policy guidance amid challenges such as lack of investment, construction permits, and transmission infrastructure, Nepal’s hydropower targets will be adversely affected. Lawmakers, industrialists, IPPAN, and planners emphasize the need to remove this provision.
This article was originally published on bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
