The Independent Power Producers Association Nepal (IPPAN) has welcomed the prioritization of transmission line construction in the upcoming fiscal year’s budget. IPPAN Chairman Ganesh Karki has urged the government to implement its commitment to finalize power purchase agreements (PPAs) for all projects within 180 days. Business leaders have drawn the government’s attention to the need for ensuring payment security for the private sector and removing bureaucratic impediments, which have been caused by the unbundling of the Nepal Electricity Authority (NEA). Kathmandu, May 21 – Energy sector entrepreneurs have expressed approval for the budget introduced for the next fiscal year, highlighting the prioritization of transmission lines as a highly positive step. Ganesh Karki, Chairman of IPPAN, described the government’s recent budget focus on energy infrastructure, particularly transmission line construction, as a constructive and welcome initiative.
At a ‘Post-Budget Discussion’ organized by IPPAN on Thursday, Chairman Karki addressed the issue of electricity wastage due to inadequate transmission lines, emphasizing that this year’s budget raised hopes for resolving the problem. “In the past, we generated electricity at numerous locations, but without proper transmission lines, much of the power went to waste. This time, the government has allocated a greater budget for infrastructure, especially transmission lines, which is extremely welcome,” Karki stated. He underscored that development is impossible without infrastructure, framing this as a positive government move.
Expressing satisfaction with the budget and the government’s 100-point reform program that provides for PPAs under a ‘Take or Pay’ basis for projects up to 10 megawatts, Karki called for this provision to be fully opened. He stressed the effective implementation of the government’s commitment to finalize all PPAs within 180 days. “Without PPAs, there is a risk of over NPR 10 billion in stranded investments, so the government must fulfill its commitment,” he remarked.
Former IPPAN Chairman Krishna Acharya lamented the bureaucratic obstacles hampering the execution of government policy decisions. He pointed out that discrepancies between political leadership announcements and bureaucratically drafted legal language have caused problems in the private sector. Acharya stated that given the political stability and end of conflicts, the country cannot afford to make excuses for development delays. “The people have given the government a clear mandate with nearly two-thirds majority votes; now there is no excuse for inaction,” he said.
While energy entrepreneurs were once accused of being covert or unorganized, Acharya affirmed that the private sector is now a key driver of national development. IPPAN advisor Arun Subedi highlighted systemic faults as the main reason for consistent neglect of the private sector irrespective of which party holds the finance ministry. Commenting on the budget and the finance minister’s role, Subedi explained that the constitution’s preamble references a ‘socialist orientation,’ which limits the finance ministers’ ability to deliver fully liberal and market-oriented budgets.
He noted a conflict of interest arising from the government’s direct involvement in business activities. “Is the government a regulator or a competitor? When the government produces and trades electricity itself while urging the private sector to do the same, it creates policy contradictions. This situation hinders national development,” he said. IPPAN Vice Chairman Anand Chaudhary acknowledged that although the budget is historically large and covers many positive aspects of the energy sector, further improvements are required in implementation and policy clarity. He explained that plans to unbundle the Nepal Electricity Authority into three separate entities for generation, transmission, and distribution would enhance sector efficiency. Emphasizing the need for transparency in competitive bidding during the dry season, Chaudhary stressed the importance of ensuring payment security for the private sector amid NEA’s unbundling.
