KATHMANDU: On September 23, a meeting of the Council of Ministers passed the Bill to Amend Electricity Act 1991 through an ordinance paving the way for granting licenses to the private sector for electricity trade. Following the prorogation of the Federal Parliament on 16 September, the government decided to issue the ordinance to enforce the bill.
A high-level source at the Office of the Prime Minister and Council of Ministers told nepalinfrastructure.com that the government is preparing to send the ordinance to the Office of the President for endorsement. “The ordinance will be registered at the Office of the President today itself or tomorrow for authentication by the President,” said the source.
A draft of the Electricity Bill prepared in 2000 has been collecting the dust in parliament. The bill, which was passed by the Legislature Committee of the National Assembly, was withdrawn by the government before the ordinance was passed by the cabinet, due to legal complications that prevents the government to come up with another bill as another bill is already registered in the parliament.
Secretary at the Minister of Energy, Water Resources, and Irrigation Sushil Chandra Tiwari said the ordinance was issued as the existing act does not envisage allowing the private sector for power trade. Tiwari also said the absence of sitting parliament left no option but to issue an ordinance. “Power Purchase Agreement (PPA) has been blocked due to the absence of a provision in the existing laws to allow the private sector for power trade. We withdraw the bill which is under consideration in the parliament, to clear the deck for the ordinance,” he said. The process of granting licenses to the private sector for power trade will begin by amending the existing guidelines after the President authenticates the ordinance.
The private sector has welcomed the ordinance that addressed the long-standing demand for liberalization of power trading. “It is a very positive move of the government as the ordinance has fulfilled our long-standing demand for granting license to the private sector for electricity trade. However, we wanted the government to pass the Electricity Bill through the Parliament itself,” said Krishna Prasad Acharya, President of Independent Power Producers Association Nepal (IPPAN).
According to the Department of Electricity Development (DoED), Nepal Power Exchange Ltd (NEPEX) and Power Trading and Energy Exchange Ltd (PTEEL) have applied for power trading licenses. Similarly, Nepal Infrastructure Bank has applied to the Ministry of Energy, Water Resources, and Irrigation on behalf of the Power Trading Company (PTC) Ltd, and Himalayan Trading Company is also preparing to register an application for the license.