IPPAN Calls for Major Energy-Sector Reforms, Opening 17,000 MW PPA Process

The Independent Power Producers’ Association, Nepal (IPPAN) has submitted a comprehensive set of policy and legal reform recommendations to the government, calling for the removal of regulatory and administrative hurdles in Nepal’s energy sector.

IPPAN has urged the government to open electricity trading and transmission access to the private sector, resume the Power Purchase Agreement (PPA) process for around 17,000 MW of projects, maintain hydropower licences for up to 50 years, and introduce a one-window approval system.

The association said immediate reforms are necessary to maximize Nepal’s hydropower potential, improve investment certainty and safeguard more than NPR 4 trillion in potential future energy-sector investment.

IPPAN has proposed amending the Electricity Act, 2049 to allow private-sector participation in domestic and cross-border electricity trading. It has also called for immediate implementation of open access to transmission infrastructure and a transparent wheeling-charge mechanism.

The association has demanded the reopening of PPAs for projects representing around 17,000 MW of capacity and proposed a standardized, bankable PPA framework with clear decision-making timelines.

It has also sought a review of PPA rates, citing rising inflation, construction costs and foreign-exchange fluctuations since the existing rates were introduced.

IPPAN has called for hydropower licences to be maintained for up to 50 years in line with the Electricity Act, 2049. It has also sought automatic extension of the Required Commercial Operation Date (RCOD) when delays are caused by circumstances beyond developers’ control, including government approvals, land acquisition, forest clearance and transmission infrastructure.

The association has proposed common transmission corridors along river basins and called for restructuring the Nepal Electricity Authority into separate structures for generation, transmission, distribution and trading, with an autonomous Load Dispatch Centre.

IPPAN has proposed allowing EIA approvals at the secretary level and completing environmental studies within one year.

It has called for faster tree-cutting and land-compensation procedures following EIA approval and proposed a “Silence is Consent” provision if concerned government agencies fail to respond within prescribed deadlines.

The association has also sought clearer legal provisions for hydropower and transmission projects in protected areas and national parks, along with special land-ceiling provisions and faster land acquisition for energy projects.

IPPAN has proposed establishing a Special Energy Fund for hydropower, transmission, energy storage and green-hydrogen projects by mobilizing government, financial-sector and climate-finance resources.

It has also sought customs and tax facilities for energy projects, long-term foreign-exchange hedging mechanisms and easier debt servicing from electricity-export earnings.

On capital-market financing, IPPAN has proposed allowing hydropower companies to issue IPOs after achieving 50 percent physical progress and called for simplified procedures for raising funds through energy bonds and debentures.

IPPAN has demanded a “One Project–One Approval File” and “One Door/One Window” system to reduce delays caused by coordination among multiple government agencies.

It has proposed a common digital approval platform and full implementation of the “Silence is Consent” principle, under which applications would be considered approved if authorities fail to act within the legally prescribed timeframe.

IPPAN said these reforms would reduce bureaucratic delays, improve investment certainty and help unlock Nepal’s large-scale energy development potential.