KATHMANDU, July 20: The Nepal Electricity Authority (NEA) has begun preparations to extend the deadline for hydropower projects that are under construction but have not yet started supplying electricity within the timeframe set in their Power Purchase Agreements (PPA). The deadline, known as the Required Commercial Operation Date (RCOD), is the time period by which a project must begin commercial operation.
NEA’s board of directors recently decided to classify projects into four categories before granting extensions. Energy Minister Biraj Bhakta Shrestha announced through social media that new online guidelines have been introduced to group projects based on their progress, RCOD status, and compliance with PPA obligations.
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Projects in Group A are those whose deadline has not expired and that have met key requirements such as securing production licenses, arranging finances, and managing land. Group B covers projects delayed mainly due to NEA’s transmission line or substation works, as well as expired projects with more than 25 percent construction progress. These will be closely monitored by the Electricity Trading Department. Group C includes projects that failed to meet major obligations like licenses or financing on time, or those with less than 25 percent physical progress by the end of the deadline. Group D consists of projects that have not fulfilled obligations or whose survey and production licenses have been cancelled even after the deadline expired.
For hydropower projects, physical progress will be judged by construction of core structures such as headworks, tunnels, and powerhouses. For solar projects, indicators include land management, panel purchase agreements, letters of credit, and installation of mounting structures.
Energy entrepreneurs have long demanded deadline extensions, arguing that genuine developers need more time while inactive promoters should be discouraged. NEA expects the new system to make project management more transparent and accountable, while helping connect electricity to the national grid faster.
According to NEA, 30 projects with a combined capacity of about 1,292 MW have already applied for deadline extensions. Their construction progress ranges from as little as 4 percent to full completion.
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