The government is planning to extend the duration of survey licenses of power projects. The government has registered an amendment bill to the Nepal Electricity Act, 1992 at the House of Representatives with an arrangement that the duration could be extended by a maximum of two years in case of special circumstances. The amendment proposal was included in the Some Nepal Acts Amendment Bill registered at the house. As per the Nepal Electricity Act, 1992, the term of license to be issued for the survey of electricity can be of five years at maximum. “The duration of the survey license could be extended by a maximum of two years if the survey could not be carried out due to incidents like natural calamity, general strikes, and curfew,” the Amendment Bill states. The Department of Electricity Development (DoED) has so far issued survey licenses for 123 hydropower projects having a combined capacity of 12,351.929 MW. Similarly, DoED has issued survey licenses for 47 solar projects with a combined capacity of 1,248.59 MW.

A senior DoED official said there is a need for an extension of the survey license duration in the situation of natural calamities and other crises such as the Covid-19 pandemic and major political upheavals that can disrupt the surveys. “We also felt the need to extend the survey license period for large storage-type hydropower projects,” the official said. “It takes enormous time to study large projects.”

However, the DoED official said for smaller power projects and run-of-the-river (ROR) type projects, the existing five-year term of survey license is sufficient. Besides unavoidable circumstances, the government’s policy has also been hindering the efforts of completing the survey at the earliest date possible. “For example, license holders show no hurry to carry out surveys if a power purchase agreement (PPA) is not guaranteed,” the official said. For example, the Nepal Electricity Authority (NEA) halted the PPA signing with the developers of the run-of-the-river type projects for the last three years citing the financial risks for it while buying more power in the rainy season. In February, the state-owned power utility decided to sign a PPA with the developers of ROR projects under the ‘take or pay’ modality for up to 1,500 MW. NEA's decision came eight months after a Cabinet meeting directed the authority to do so. The extension of the survey license could, however, slow down the process of project development. “Genuine developers do not want to extend the duration of the survey license because of the high renewal fee,” the official said. A developer of a power project from 1MW to 5MW needs to pay Rs 1 million per year in licensing fees. Similarly, a developer of over 500 MW projects needs to pay Rs 6 million annually in fees.