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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
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<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
<div>
</div>
<div>
Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<div>
<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
<div>
</div>
<div>
Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
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It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this.
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable.
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board.
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone.
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects.
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA.
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously.
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW.
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document.
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others.
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change.
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation.
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment.
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
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<div>
Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
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It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
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The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
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Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
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On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
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Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
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(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
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<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
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<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
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(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
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<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
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Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
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<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
<div>
</div>
<div>
Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
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Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
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It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
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</div>
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Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
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Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
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The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
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Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
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Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
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</div>
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On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
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Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
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Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
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There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
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Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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<strong style="font-size: 12px;">--By Khadk Bahadur Bisht</strong></div>
<div>
</div>
<div>
Promoters of Upper Karnali, Arun III, Tamakoshi III and lower Arun have demanded for Project Development Agreements (PDA) with the government while Foreign banks’ hesitate to invest in hydropower in the absence of government commitment. Promoters have been demanding for security from the government due to high risks associated with this sector and drafting the PDA is closely related to this. </div>
<div>
</div>
<div>
It was initially known as ‘Project Agreement’ (PA). The term was later changed to Project Development Agreement (PDA). The PDA draft was initiated after immense pressure from the developers. However, the present draft has been criticised for not being bankable. </div>
<div>
</div>
<div>
Promoters of big projects had applied for PDA in 2010 when there was no Investment Board. After the board was established, the government decided to adopt the practice, whereby the projects 500MW or above came under the responsibility of the Investment Board. </div>
<div>
</div>
<div>
Similar contracts between the government and investors are prevalent in countries like Canada and Australia. PDA is meant to .. the risks and returns between the government and the investors as neither of them can bear all of the risks alone. </div>
<div>
</div>
<div>
The Investment Board started to draft the PDA according to investment polices of foreign banks. Meanwhile, the government decided to bring even projects with capacities below 500 MW under the purview of the PDA. Ministry of Energy thus drafted a separate PDA. The risks are almost the same even in 499 MW projects. </div>
<div>
</div>
<div>
Although the objectives are similar, there are differences between the draft presented by the board and that by the Ministry of Energy. Fundamental differences are seen between the ministry’s draft two years ago and its draft today. The previous thinking was that only foreign developers needed the PDA. </div>
<div>
</div>
<div>
Policy stability is a must for hydropower projects and this is one reason why the private sector has begun to pressure the government for PDA. They fear that if the government increases the rate of VAT, the project cost will go up enormously. </div>
<div>
</div>
<div>
On the other hand, if the bank sees low possibility of pay back, it may stop releasing even the sanctioned funds, this jeopardising the project. Investors have therefore demanded that a PDA should be made mandatory for projects with capacities less than 500MW. </div>
<div>
</div>
<div>
Recently, the Independent Power Producers’ Association, Nepal (IPPAN) had reviewed the PDA draft formulated for lower capacity hydropower projects. We have been raising demands that the PDA should be in line with international standards. That is, the notion of give-and-take should be articulated well in the document. </div>
<div>
</div>
<div>
Failure of the government to issue the permission on time is one of the main reasons for delay in project implementation. The government has to approve the Environmental Impact Assessment (EIA) on time. Similarly, it has the responsibility of facilitating promoters at various levels where they face hurdles such as at the local level created by forestry users and by taxes levied on sand, stone aggregates and inland, cargo transportation, among others. </div>
<div>
</div>
<div>
There has been doubt among private investors regarding inconsistency in law and the tax structure. The government should investors from frequent changes in policy and should pledge to bear all risks if generated by such abrupt change. </div>
<div>
</div>
<div>
Force majeure provision of another point of contention. Force majeure prevails when the situation is out of control of the developer such as in case of natural calamity. But in Nepal, government action is major such situation. </div>
<div>
</div>
<div>
Similarly, we have differences on various issues including lender rights and rights on water, among others. The draft is ambiguous on such issues and we want clarity for long term investment. </div>
<div>
(Bisht is Vice President at Independent Power Producers’ Association, Nepal (IPPAN))</div>
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