Independent Power Producers’ Association, Nepal (IPPAN) has declared protest upon the government, putting forth a 12-point charter of demands.
Arranging a press conference in Kathmandu on Wednesday, the umbrella organization of the private sector power producers also warned that they would hand over keys of all sick hydropower projects to the government if their demands are not fulfilled even after the second-stage of their protest.
Independent power producers began their agitation in mid-August. In the first stage of their protest, they put forth their demands with concerned government agencies and held interaction with authorities to press them for satisfying their demands.
Some of their demands involve immediate reimbursement of the subsidy declared for hydropower projects which have already started commercial production as announced in the budget speech for Financial Year 2014/15, lowering of bank lending rates for hydropower projects to single-digit and 5% for mini-hydro power projects which are in operation, and providing posted rate (Rs 4.8 per unit in wet season and Rs 8.4 per unit in dry season) even for small hydropower projects having capacity below 25 MW.
The IPPAN has also demanded increment in compensation resulting from outage losses due to fault of transmission lines of the Nepal Electricity Authority (NEA).
“The NEA provides us a maximum of 5% of outage losses in line with the power purchase agreement. However, many small hydropower projects are facing 17% to 21% outage losses out of total generation due to problems in transmission lines of the NEA,” said Prakash Dulal, the executive director of Aarati Power Company Ltd – the developer of Upper Irkhuwa Hydropower Project (14.5MW).
“The government does not build transmission lines. There cannot be the construction of projects until there is a transmission line. But, the NEA penalizes power producers if they do not supply energy in line with the agreement,” he added.
According to IPPAN, 25 hydropower projects developed by independent power producers are ‘sick’ as they have either failed to service their debts or reeling under financial crisis.
“The demands that we have put forth to the government are for the implementation of facilities and pledges that the government and the Nepal Electricity Authority have made,” said Surya Prasad Adhikari, the coordinator of the sick project coordination committee of IPPAN. “We have not got even those facilities and incentives that the government has provided to the foreign investors,” he added.
Bijay Man Sherchan, CEO of Khanikhola Hydropower Company Ltd, said that power producers were facing losses due to a lack of transmission lines. “We are supplying electricity from 11 kV transmission lines as the NEA has not provided a 33 kV transmission line. But we have to pay compensation to the NEA if we fail to supply the required amount of energy,” said Sherchan.
As part of the protest programs, the IPPAN has said that it will submit a memorandum to the government agencies, NEA, Nepal Rastra Bank, and Prime Minister and hold a sit-in in front of the NEA, Electricity Regulation Commission and other agencies.
The agitating power producers have also warned that they will hand over the key of sick projects to the Minister for Energy, Water Resources and Irrigation on October 18 if their demands are not fulfilled by then.