Premium rates for hydropower projects lowered; charges for riot, terrorism risks removed

KATHMANDU, SEPTEMBER 5: The Nepal Insurance Authority has announced a reduction in the insurance premium rates for hydropower projects. The authority recently revised the Property Insurance Directive 2080, implementing lower premium rates.

Under the revised directive, the total insurance premium for consequential loss insurance for hydropower projects is now set at NPR 500,000 for a coverage period of up to three months, down from the previous rate of NPR 512,000.

Likewise, for six months of coverage, the new rate is NPR 560,000, compared to the earlier NPR 572,000. The premium for a nine-month coverage period has been reduced to NPR 600,000 from NPR 620,000, while the 12-month premium is now NPR 640,000, down from NPR 660,000.

Additionally, the revised directive has removed the insurance premium for risks related to riots, terrorism, and malicious acts. While coverage for these risks remains mandatory under consequential loss insurance, the premium charges for these risks have been eliminated. Previously, the premium rates for such risks were 30 paisa per NPR 1,000 of coverage for a six-month period and 50 paisa per NPR 1,000 for a 12-month period, applicable to a sum insured of up to NPR 40 million.

Consequential loss insurance provides financial protection for hydropower projects that are unable to generate electricity due to damage to their infrastructure. This coverage compensates for the loss of revenue until the infrastructure is restored and power generation can resume.