Private power producers face financial loss of Rs 1 billion after NEA refuse to procure full capacity electricity

Kathmandu: Private hydropower companies say they incurred losses of Rs 1 billion, which they have blamed on the reluctance of Nepal Electricity Authority (NEA) to procure the electricity produced by private power producers.

According to Independent Power Producers Association Nepal (IPPAN), the NEA has been purchasing partial electricity produced by 22 private sector-run power projects since June. Due to this reason, a total of 11 operating projects faced losses totaling Rs 928.58 million.

Chepe Khola, Lower Modi, Dordi Khola, Ghalemdi Khola, Nyadi Hydropower, United Idi Mardi, Chhyangdi Hydropower, Buddha Bhumi Hydropower, Upper Syange Hydropower, Synergy Power and Naugadh Hydropower were among the projects that suffered due to NEA policy.

The private sector power projects have long been complaining against the NEA for failing to purchase electricity on par with the full capacity production of the power plants. As a result, the companies are compelled to sell only a small amount of electricity, while withstanding wastage of a large portion of their produce.

NEA on the other hand said that the authority has assured the hydropower companies to procure their full capacity production only if they follow the power purchase agreement (PPA). “Many of these companies have been found breaching the bilateral agreement, lacking network and transmission lines,” said Suresh Bahadur Bhattarai, spokesperson for the NEA.