Nepal government declares National Energy Crisis Reduction and Electricity Development Decade.

The government has declared a National Energy Crisis Reduction and Electricity Development Decade with the aim to end the existing energy crisis of the country by constructing ten thousand Megawatts in 10 years. Below is the gist.

1)      "Take or Pay" for all projects (COD within FY 2082/83).

2)      Dollar PPA for 10 years to mitigate the Forex (Foreign currency loan).

3)      Security personnel (army and armed police force) will be deployed in the project at developer’s own cost.

4)      8 escalations for projects up to 100 MW.

5)      No penalty to NEA for not supplying the contract energy (up to 10 MW project).

6)      Provision of NRs. 50 lakhs per MW as a VAT subsidy extended till FY 2082/83.

7)      RCOD extension for up to 1 year for the projects affected by the earthquake.

8)      Previous tax holiday will be extended till FY 2082/83.

9)      The affected locals can convert the resettlement cost as their equity investment.

10)   Approval for felling of trees within a month.

11)   Those who obstruct the construction work will be charged under public offence.

12)   10% of the total installed capacity as a maximum limit for solar and wind.

13)   Benchmark unit rate for Solar and Wind energy is 9.61 per kWh.

14)   “Take or Pay” PPA for Solar and Wind energy for 25 years.

15)   Energy Security Policy shall be implemented within six months

16)   Generation Mix Target

·         Pump/storage = 40 to 50%

·         Peaking RoR = 15 to 20%

·         RoR  25 -30%

·         Other Sources= 5 to 10%

17)   PPA rate for Storage and PRoR project will be determined.

18)   Transmission and Substation to evacuate 10,000 MW within 10 years will be constructed.

19)   Minimum 15% of the total loan has to be invested in energy sector by the banks.

20)   Time of the Day (TOD) metering system in Kathmandu.

21)   Yearly rent to the landowners of Right of Way (ROW) on top of 10 percent compensation.