The joint FNCCI- IPPAN Delegation Team today met with Hon'ble Mr. Gokarna Bista, minister for energy and Mr. Ramji Sharma, State Minister for Energy.  Mr. Suraj Vaidya and Dr. Subarna Das Shrestha represented FNCCI and IPPAN. Also present in the meeting were: Mr. Kumar Pandey, Mr. Manoj Goyal, Mr. Gyanendra Lal Pradhan, Mr. Kiran Malla, Mr. Krishna Acharya, Dr. Hemanta Dawadi, Dr.Uttam Kunwar, Mr Bharat Nepal and Mr. Pradeep Gangol.

Suraj Vaidya, President, FNCCI

The Energy ministry needs to immediately address to the needs of developers, who are in the process of generation of power. Otherwise, the goal of ending load shedding by 4.5 years would not be met. So, FNCCI and IPPAN delegates are here to put their points.

We in FNCCI feel that there is no immediate solution to ending load shedding in near future. The much talked about diesel plants or thermal plants are not financially viable in Nepalese context. So, the government should try to import power from India.

Provided that Government of Nepal is committed to provide quality power in a regular way, I will try to convince other industrialists to pay higher electricity tariff for a period of 4.5 years, after which load shedding would be a thing of the past.

So far as indo Nepal co-operation in hydropower is concerned , we are ready to initiate dialogue with our Indian business partners, provided that the Government of Nepal gives us some sort of policy guidelines in matters related to energy development. We understand that there are some sort of inhibitions on the part of the government to open dialogue with Indian government. But if the government wants, we can dialogue with our Indian business partners and through them to Indian Government.

Dr. Subarna Das Shrestha, President/IPPAN

We, developers , are disappointed by NEA's decision to apply the new PPA rates to new PPAs only. We want to draw the attention of the government that such moves will not help to attain the government's target of generating 2500 MW of power within 4.5 years. We are further disappointed by NEA to reduce the price escalation of 3 % from nine years to five years, whereas, we have been asking for price escalation of 5 % for nine consecutive years.

He further referred to the decision taken by cabinet Ministry on Chaitra 8 2067 and publicly announced through CA by Rt. Hon'ble Mr. Bharat Mohan Adhikary,DPM , Finance and the then Minister for energy . In his "The Energy crisis mitigation plan of action of Gov of Nepal ", he has clearly mentioned the ppa tariff increment for all projects new and under construction by 20 % in today's rate. He also added that those who will start cod within 4.5 years should atleast be taken consideration among the underconstruction project to be eligible for 20 % increment.

We therefore strongly request the government to re-consider the decision and make applicable the new PPA rates to those developers, among the ppa concluded and underconstruction who generate power within the timeframe of 2072 Paush B.S.

It is the duty of the government to rescue the power projects which have financial problems so that they are constructed in time. This is very crucial in the present severe energy crisis of Nepal.

Other options to make projects feasible include the front loading concept. The developers will be paid higher PPA rates for 15 years, after which the rates will be reduced substantially.

Hon'ble Mr. Gokarna Bista:

We are keen to effect changes in the way, NEA is being managed. I have discontinued the practice of appointment of MD by the minister.

When we talk about PPA rates, the financial health of NEA should also be taken into consideration. From your memorandum and discussion, I got the impression that something must be done to boost the morale of genuine developers (producing less than 25 MW), who are keen to construct projects at the soonest time possible, provided that the projects be made feasible again by revising the PPA rates. From your presentation, I got the impression that small hydropower projects are getting less attractive PPA rates, compared to that of large projects and NEA projects.

Of course, there are other ways also to help the developers like VAT Exemption, minimum custom duties etc. You have raised the issues of Front loading also. I suggest organizing a tripartite meeting of MoEn, NEA and IPPAN and discussing the issues seriously.

Regarding the proposal of FNCCI president that the industrialists are ready to pay higher electricity tariffs, provided that the power supply is regular and time bound. It is worth thinking. If you are running diesel plants at the cost of 30 Rs per unit for your industries, I see no reason, why you cannot pay, say 10 Rs per unit.

Since, the load shedding problems cannot be solved by diesel plants or thermal plants; we are trying to import power from India. We are going to upgrade the transmission line from Raxual to Parwanipur for import of power from India.

We need very badly cross border transmission line also to sell our surplus energy to India during wet season.

The initiative taken by the FNCCI President to open dialogue with the Indian business partners is most welcome. It is because; government may have certain degree of inhibitions/ constraints/limitations to talk with the Government of India. Once the business partners of India understand the issues, they can lobby for the issues to Government of India.

I also suggest to organize another meeting with the participation of developers, bankers and MoEn officials ( Incl. Hon'ble minister) to discuss on issues related to project financing in near future.