Government Initiates Process to Cancel Licenses of Non-Operational Hydropower Projects

The government has initiated the process to cancel licenses of hydropower projects that have remained non-operational for an extended period. A committee formed by the Ministry of Energy, Water Resources and Irrigation has recommended revoking the permits of 38 hydropower projects that have Power Purchase Agreements (PPAs) but have shown no progress. Energy expert Prabal Adhikari emphasized that canceling licenses alone is not a solution; the underlying causes of project delays must also be identified.

Since 1st Ashad (mid-June), the government has been moving forward with this process. The committee recommended cancelling permits for 38 hydropower projects with a combined capacity of 1,388 megawatts that have entered into PPAs but have not made any significant progress for a long time. The Department of Electricity had also earlier recommended license cancellations for 11 projects. The ministry has confirmed that the cancellation process is ongoing and will be carried out through the Department of Electricity Development.

According to ministry officials, project progress has been classified into ‘Green,’ ‘Yellow,’ ‘Yellow Plus,’ and ‘Red’ zones based on the level of advancement. Fifteen projects with over 50 percent progress within five years are being prioritized and encouraged for rapid completion. Meanwhile, 75 projects with extremely poor progress have been listed as problematic and will face necessary actions.

Energy analyst Prabal Adhikari stated that license cancellation is not the ultimate solution. He stressed the need to investigate the internal reasons behind project stagnation. Without identifying the root causes, simply canceling licenses and reallocating them to new stakeholders could lead to recurring problems and further delay national objectives.