Power producers say political stability, conflict and increasing incidents of banda and strikes have rendered investment expensive and time consuming. [break]
"If the rate is adjusted as per our demand, private sector can generate 300 to 500 MW electricity in coming four years," Dr Sandip Shah, president of Independent Power Producers´ Association Nepal (IPPAN) told media people on Thursday.
He also claimed that local investors won´t be attracted in hydropower projects at present power purchase agreement (PPA) rate and further added that there was no possibility of foreign direct investment in the sector.
Private power producers claimed that the existing PPA rate does not encourage private sector to put their money in hydro projects. Currently, the approximate weighted average PPA rate stands at Rs 4.44 per unit.
"Increasing cost of construction materials, double digit inflation rate, increased interest rates by banks and financial institutions are the major factors that are making hydropower projects costlier,” Shah told media people.
Few months ago, commercial banks jacked up interest rates to 14 percent in average from 10 to 11 percent, which is making it difficult for power developers.
Another private investor Dr Subarna Das Shrestha also demanded NEA to redefine the duration of dry and wet season.
NEA buys power from private producers at Rs 4 per unit in wet season (eight months) and Rs 7 in dry season (four months).
Shrestha suggested redefining dry and wet seasons of six months each.
“Nation building is impossible without electricity. But the government is not listening to us,” said Hari Bairagi, president of Small Hydro Power Developer Association.
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