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Eight months after the government ordered the Nepal Electricity Authority (NEA) to sign power purchase agreements (PPA) with run-of-the-river (RoR) hydropower projects for up to 1500 MW capacity, the state-owned power monopoly has finally decided to resume signing the PPAs addressing a major demand of the independent power producers (IPPs). The NEA board meeting on Thursday decided to do PPA for up to 1500 MW  under take or pay modality. The meeting chaired by Deputy Prime Minister and Minister of Energy, Water Resources and Irrigation Rajendra Linden decided to move ahead with PPA of RoR projects on the basis of the date-wise chronological order of the Grid Connection Agreement. The electricity produced by these projects will be purchased on the basis of the principle of 'take or turn'. NEA will buy electricity generated from the projects at Rs 8.40 and Rs 4.80 per unit for the dry season and rainy season respectively. As of now, NEA has signed connection agreements with 136 projects for a combined capacity of 3,192 MW. NEA had stopped signing PPAs with the hydropower developers of the ROR projects three years ago citing the 'financial risks' involved in such power produced by such projects. According to NEA, buying more power will add more financial burden to the organization as it is experiencing power spillage during the rainy season due to low domestic consumption and inadequate access to the Indian market. In April 2018, the Ministry of Energy issued a white paper and decided to generate 15,000 MW of electricity in the next 10 years. Of the targeted 15,000 MW, PPAs were planned on the basis of the take-or-pay principle by keeping the ratio of reservoir and pump storage at 30 to 35 percent, peaking RoR at 25 to 30 percent, RoR at 30 to 35 percent and other alternative sources. A meeting of the cabinet of ministers on July 8, 2022, reviewed the production mix ratio and reduced it by 10 percent for reservoirs and increased it by 10 percent for RoR projects. As per the latest revision, the ratio of reservoir projects will be maintained at 20 to 25 percent, peaking RoR at 25 to 30 percent, RoR at 40 to 45 percent, and other alternative sources at 5 to 10 percent. With this, the limit for PPA for the RoR project increased from 5250 MW to 6750 MW.  According to the NEA Executive Director Kulman Ghising, with the latest decision, PPAs of the RoR projects can be signed until the limit of 6750 MW is reached. "The PPA of RoR projects was stopped about three years ago, as there was a possibility of a big financial risk to the authority due to the lack of market certainty for the sale of electricity during the rainy season," said Ghising. The NEA expects the developers to take 5–7 years to complete the projects. “By that time, the domestic demand for electricity will also increase significantly and our power exports to neighboring markets will also rise significantly,” said Ghising. “That’s why we've decided to resume the signing of PPAs.”

The Nepal Management Association, the apex body of the management professionals, honored Chief Executive Officer (CEO) of eSewa Money Transfer Ajesh Koirala with the ‘Manager of the Year 2022’ award. The Association honored Koirala with the award for his contribution to the management sector of Nepal. He was honored amidst a special function organized at Hotel Everest in Kathmandu on Saturday. Koirala thanked the Association for selecting and honoring eSewa. He said that they reached this stage with the love and support of Nepalis living abroad, operators of the company, staff and F One Soft Group.

In a contrary to the expectations that monetary arrangements will be eased for credit expansion, the Nepal Rastra Bank (NRB) has continued the existing direction of the monetary policy for the current fiscal year. In a mid-term review of the monetary policy announced on Friday, the central bank continued its approach of controlling credit expansion ignoring the increased calls for easing from the business community and asset market investors. With the review, the central bank has made it clear that economic risks still persist and that the easy availability of credit could again lead to a situation of a surge in imports and depletion of forex reserves.  With import restrictions lifted, ease of credit could again mount pressure on the external sector of the economy, according to the NRB. Thanks to the eight months-long import restrictions, the country's external sector has come back to normalcy with rising forex reserves and remittances and improving the balance of payment (BoP). NRB had announced a tighter monetary policy last July mainly due to the shaky situation of the country's external sector. The central bank in the half-yearly review of the monetary policy has provided some flexibility for small borrowers.  The central bank has extended the time for borrowers who are facing difficulty to pay loan installments and interest amounts on time due to a lack of cash flow. Banks have been barred from taking penalty interest if a borrower makes payment of loans along with the interest within a month after the expiry of the deadline till mid-June 2023. Likewise, the central bank, in order to facilitate the operation of small and medium enterprises and businesses, has also come up with a provision that loans up to Rs 20 million that has remained active until mid-January, 2023 can be restructured and tabulated within mid-July, 2023 16 after analyzing their cash flow and incomes. As NRB continued with its policies of monetary tightening, the private sector bodies have expressed displeasure over the mid-term review. In a public event held in Kathmandu on Friday, the President of the Federation of Nepalese Chambers of Commerce and Industry Shekhar Golchha said that the review of the monetary policy has not come as expected. "In order to boost the economy in the current state, it is necessary to make the economic activity sustainable, for that the interest rate had to be reduced. However, the central bank did not bring a concrete policy to reduce the borrowing rate,'' said Golchha. During the same event, FNCCI Vice President Anjan Shrestha, also termed the mid-term review of the monetary policy as 'insufficient'. However, Prakash Kumar Shrestha, Executive Director of NRB said that there is still a risk of imports surging following the lifting of restrictions. If that happens, it will again put pressure on the external sector. "Along with this, the average inflation is still above the target. Therefore, the NRB has not deviated from the direction of the monetary policy during the mid-term review," said Shrestha. NRB has kept the interest rate corridor unchanged. The cash reserve ratio (CRR), is unchanged at four percent while the statutory liquidity ratio (SLR) is also kept unchanged at 12 percent. The central bank has said it will introduce a policy of providing overnight liquidity facilities to banks and financial institutions at an interest rate of 7 percent. Earlier, banks and financial institutions were given overnight liquidity at 8.5 percent interest. "This will help to reduce the borrowing rates," said Shrestha. Similarly, a policy has been introduced to make the monitoring of the spread rate and the premium charged from borrowers effective. The spread rate, which is currently 4.4 percent, has been arranged to be reduced to 4.2 percent by mid-March and to 4 percent by next June through the first quarter review of monetary policy.

The Nepal Stock Exchange (NEPSE) plunged by 60. 77 points to close at 2,121.86 points on Sunday. Similarly, the sensitive index dropped by 10. 99 points to close at 404. 43 points. A total of 8,139,840 unit shares of 253 companies were traded for Rs 3. 04 billion. Meanwhile, Khaptad Laghubitta Bittiya Sanstha Limited was the top gainer today with its price surging by 59. 00 percent. Likewise, Ngadi Group Power Limited was the top loser with its price dropped by 20. 90 percent. At the end of the day, the total market capitalization stood at Rs 3. 06 trillion.