"Apex court's recent ruling could disrupt 20,000 MW of electricity production"

KATHMANDU, JANUARY 26: The Independent Power Producers’ Association, Nepal (IPPAN) has expressed concerns that the recent Supreme Court (SC) ruling could lead to the shutdown of approximately 20,000 MW of hydroelectric power production.

In a press conference held in Kathmandu on Sunday, IPPAN raised objections to the SC's decision to annul the amended provisions of the National Parks and Wildlife Conservation Act 1973. The constitutional bench of the court deemed the amended provisions contrary to the spirit of the Constitution, which has resulted in a ban on development projects in national parks. As a consequence, IPPAN claims that this decision will halt the ongoing and upcoming 20,000 MW hydroelectric projects.

The Association had previously been hopeful that the amendment of certain laws, including the Investment Facilitation Act of 2024, would facilitate private sector contributions to Nepal's economic development. However, the court's verdict has created disappointment among them. IPPAN’s General Secretary, Balram Khatri, stated that the court’s ruling has created a situation where nearly 20,000 MW of hydroelectric production could be shut down.

According to Khatri, the SC invalidating the laws duly enacted by the Parliament, which reflect the sovereign rights of the people, has complicated the work of hydroelectric projects that have been under development for the past 15 years.

He added that 267 hydroelectric projects with a combined capacity of 19,736 MW, which have already invested billions in compliance with existing laws, now face further complications due to such invalidation. The affected projects have already paid the required fees, royalties, and taxes, as well as obtained permits for power production and surveys.

Khatri also predicted that the latest move of the apex court could lead to more than NPR 4 trillion in annual losses for the state. The decision, which prevents the construction of infrastructure in protected areas like national parks, will also deprive the state of around NPR 420 billion in annual royalties, energy royalties, and taxes.

He expressed concerns that the Energy Development Roadmap, which aims to produce 28,500 MW of electricity within the next 10 years may not be achievable under these circumstances, potentially leading the country to experience load-shedding.

Ganesh Karki, President of IPPAN, also criticized the court's ruling, emphasizing that the state should not obstruct development work. He expressed that the SC's decision preventing infrastructure development in protected areas was detrimental and that the court should consider the importance of development when making decisions.

He questioned how development projects could move forward if projects within national parks are halted. Karki urged that the state must support development work, as delays or hindrances in progress could significantly impede the country’s development pace

. He further noted that the court's verdict could jeopardize the goal of producing 28,500 MW of electricity and meeting the domestic consumption needs of 13,500 MW by 2091. If Nepal fails to effectively utilize its natural resources, the challenges will continue to grow, he warned.