IPPAN Urges Special Status and Dedicated Package for Flood-Hit Hydropower Projects
The Independent Power Producers' Association of Nepal (IPPAN) has asked the government to designate hydropower projects damaged by the August 26 flood in the Bhotekoshi–Trishuli corridor as 'Special Flood-Affected Hydropower Projects' and provide a dedicated relief and reconstruction package. IPPAN's proposals include a high-level reconstruction committee, a special reconstruction procedure, PPA extensions, tax and customs exemptions, and a dedicated reconstruction fund.
KATHMANDU, Sept 17 — The Independent Power Producers' Association of Nepal (IPPAN) has urged the government to declare hydropower projects affected by the August 26 flood in the Bhotekoshi–Trishuli corridor as 'Special Flood-Affected Hydropower Projects' and to introduce a dedicated relief and reconstruction package.
At a meeting with Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha on Wednesday, an IPPAN delegation led by President Mohan Kumar Dangi called for comprehensive legal, financial, administrative and regulatory measures to facilitate the reconstruction and rehabilitation of flood-damaged hydropower projects.
IPPAN has proposed the formation of a high-level reconstruction committee under the leadership of the Energy Minister and the immediate introduction of a 'Special Hydropower Reconstruction and Rehabilitation Procedure, 2026.' The association said the mechanism should provide a coordinated framework for rebuilding projects and restoring the sector.
According to IPPAN, the catastrophic flood significantly altered the geographical conditions of several hydropower projects—ranging from operational plants to projects under construction and those at advanced development stages. As a result, many projects may now need to be treated almost like new projects, it said.
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The umbrella organization has called for an immediate assessment and classification of damage to each project under categories including:
- Complete destruction
- Severe damage
- Partial damage
- Disruption of access and transmission infrastructure
- Indirect losses caused by prolonged generation shutdown
Such classification, it said, should form the basis for determining appropriate relief, concessions and reconstruction measures.
The proposed reconstruction procedure should integrate issues related to project permits, environmental approvals, forest use, land acquisition, transmission infrastructure, loan restructuring, insurance claims, tax and customs exemptions, power purchase agreements (PPAs) and project completion deadlines, IPPAN said.
Among its key demands are:
- Extension of PPA periods
- Review of PPA rates
- Expedited settlement of insurance claims
- Tax and customs exemptions on reconstruction equipment
- Foreign-exchange facilities for importing replacement equipment
- Restoration of damaged transmission infrastructure
IPPAN has also called for the formation of a high-level steering committee and a dedicated task force to coordinate the entire reconstruction process through a single mechanism. It has proposed that the Department of Electricity Development (DoED) serve as the principal implementing and coordinating agency.
It has sought extensions of survey and generation licences, as well as project completion deadlines, based on the extent of damage. Where reconstruction under existing arrangements is not feasible, the government should allow projects to proceed through a new licensing mechanism, according to IPPAN.
IPPAN also highlighted the need to restore transmission and electricity exports. It noted that several hydropower projects unaffected by the flood remain outside the national grid due to damage to transmission infrastructure. The association has therefore called for an immediate transmission and power-export restoration plan, with reconstruction of damaged lines accorded national priority.
To finance reconstruction, IPPAN has proposed establishing a special hydropower reconstruction fund under the Ministry of Finance. The fund could mobilize resources from the government, development partners, concessional lending institutions, climate and green funds, donor agencies, insurance proceeds and private-sector contributions.
The association has also urged the Securities Board of Nepal to facilitate the issuance of rights shares, bonds and green bonds, with priority given to expediting rights-share issuance by affected hydropower companies.