The government has announced a revised policy framework for reservoir-based hydropower projects, introducing variable power purchase agreement (PPA) rates. Projects with capacities up to 100 MW will receive a maximum of Rs 14.80 per unit during winter and Rs 8.45 per unit in the monsoon season. For projects exceeding 100 MW, rates will be determined based on actual project expenditures. The Electricity Regulatory Commission (ERC) will fix the rates, while the Nepal Electricity Authority will oversee implementation. The new directive allows inclusion of construction costs, loan interest, foreign exchange risks, and related expenses, along with periodic rate reviews and a three-stage PPA approval mechanism to ensure financial sustainability.
