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Govt endorses below 500 MW PDA

  The move is aimed at stopping delay in project implementation


KATHMANDU: The Ministry of Energy has endorsed the Procedure Related to Hydro Electricity Development Agreement 2069.

The procedure approved on January 23 and meant for projects below 500 MW aims to ensure clarity, transparency and proper management in dealing with survey licence holders and also to curb delays in the name of Project Development Agreement.

The procedure has provisioned seven requirements for PDA, including processing fee deposit of 1500 US$ per MW in the government’s account as mentioned in the survey license for projects below 500 MW that are awarded without competition.

Likewise, they have to submit copies of Power Purchase Agreement, Connection Agreement, letter of intent of financial institutions to invest in the project along with investors’ study and analysis report of the project’s feasibility study. Likewise, shareholders for equity investment have to declare 50 per cent of their property in the documents, according to the procedure.

This is first time the government has issued the procedure to discourage the trend of holding projects for months citing the PDA, said MoE officials. MoE informed that the new guideline will deal with projects uniformly.

It is believed that this provision will separate projects that need the PDA and those that do not. Besides the trend of delaying projects will be monitored . Most of the projects have chosen not to reach PPA with NEA and financial closure on grounds of the PDA.

PDA is needed for projects that bring Foreign Direct Investment. However, multiple projects have been cheating the government for months and even years by reporting that their PDA is under way. PDA is a detailed project study that includes financial closure.

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