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Kathmandu, December 15
The government has announced important changes in its power generation policy.
As per the announcement, the government will not engage itself in a hydropower project that generates less than 100 MW.
And energy generating companies will get Rs 50 lakh VAT exemption for each MW of power generated.
Minister for Energy Janardan Sharma Prabhakar (inset, below) made this announcement at Power Summit 2016 that IPPAN, the association of Nepal’s independent power producers had organised, in Kathmandu.
The minister announced that Nepal Electricity Authority will do away with take or pay policy while signing power purchase agreements 
with parties involved in power generation. Instead of take or pay, the government will launch what Sharma called take and pay policy. The Ministry of Energy believes these policy changes will enable investors to invest in Nepal’s hydropower sector with confidence.
Now on, the government will let private parties develop power projects that generate less than 100 MW. This is expected to encourage the private sector to invest in hydropower generation.
Sharma announced: Private energy producing companies can apply for institutional shares in the government-owned Nepal’s water, people’s investment programme. The government announced it will take initiatives for reducing interest rate on investment in the hydropower sector, NEA will endorse energy emergency action plan and effectively implement provisions on post-rate.
It said it will hold talks with India immediately on implementation of the power trade agreement with India.
