6. Tactics/Hydropower Development Arrangements

The following strategies will be followed to implement the Hydropower Development Policy and fulfill the objectives contained in it.

6.16.1 Environmental Arrangements

6 .1.1 It will be arranged to implement the programs determined from the environmental impact assessment study report at the project site that will be directly affected by the implementation of structures such as power house, dam site, tunnel or canal and reservoir transmission line, distribution line of the hydroelectric production project. During the construction of the hydropower project, it will be done in accordance with the prevailing laws in the case of environmental issues. At least 10 percent of the minimum monthly average flow of the rivers and streams or the minimum required amount shown in the environmental impact assessment study report, whichever is higher, arrangements will be made to release water into the rivers and streams.

6.1.2 To build hydropower projects The private sector that gets the permission to get the required housing estate will be encouraged to provide the land. However, if the necessary real estate is not available, the government of Nepal can provide the real estate to the private sector as if it had acquired the land for the organization in accordance with the prevailing law. All the expenses incurred while acquiring the real estate shall be borne by the permittee. In case of government land, the lease will be provided for the duration of the permit in accordance with the prevailing laws.

6.1.3 Rehabilitation and resettlement of the families displaced during the generation, transmission and distribution of electricity shall be done by the permittee in accordance with the standards set by the Government of Nepal. In this work, the private sector will be given necessary support from the government level. But for that, the necessary resources will be included in the cost of the project, and the investor will have to bear it. will be arranged.

6.3 Production, transmission and distributionArrangements 6.3.1 Hydroelectricity will also be developed through single or joint or joint investment companies of private sector and public sector to flow the capital of domestic and foreign investors in hydropower, production, transmission and distribution projects. In general, foreign investors will be given priority and encouraged to make joint investments with Nepali investors.

6.3.2 Hydropower generation Capital market will be mobilized to encourage domestic investment. For this purpose, financial institutions, bonds and other financial instruments will be developed. .

6.3.4 In order to invest in projects related to hydropower generation, transmission and distribution, the approval of the Government of Nepal must be obtained in accordance with the prevailing law in the agreement to receive loans from foreign organizations. The permit holder of hydropower production or transmission and distribution projects shall take the approval and other related arrangements to be obtained by pledging shares and immovable property to the said foreign lender and other related arrangements shall be as prescribed by law. If possible, the government of Nepal can jointly participate with the private sector in such a project.

6.4 Arrangement of special investment for infrastructure development of rural electrification

6.4.1 The government of Nepal is gradually expanding rural electrification. will take Appropriate institutional arrangements will be made for this.

6.4.2 Appropriate arrangements will be made for rural electrification when distribution permits are granted.

6.4.3 Rural areas in rural areas directly affected by the power generation project. Electrification will be encouraged. The electricity consumption in such area will be exempted from energy duty. This exemption will be for the first fifteen years from the commencement of commercial production.

6.4.4 HydropowerFor the extension of electrification of the village development committees directly affected by the structure, 1 percent of the royalty amount received by the Government of Nepal from that project will be provided to the said village development committees. A Rural Electrification Fund will be established for small hydropower development and rural electrification.

6.4.6 The Government of Nepal will provide grants through the Alternative Energy Promotion Center to generate and distribute electricity by constructing hydroelectric power plants up to 100 kW at the rural level. will make In addition, such projects will be included in the priority credit area and provided with such facilities.

6.4.7 Electricity will be supplied from small hydropower projects in hilly rural areas that are out of the reach of the national electricity system. Arrangements are made to entrust the operation and management of such small hydropower projects to local cooperative groups, and these groups will also be involved in planning and implementation. 5.1 The hydropower generation project shall be automatically transferred to the Government of Nepal after the expiry of the period specified in the permit in the condition of good operation. Government of Nepal will be able to operate through agreement. When operating in this way, the former operating company will be given first priority.

6.5.2 To keep the hydropower project in good operating condition, the maintenance bases of the main electrical equipment and structures will be determined by the regulatory body and appropriate arrangements for monitoring and inspection will be made by the Power Development Department. .

6.5.3 From 2 years before the completion of the period of handing over the hydropower project, arrangements will be made for the involvement of the Government of Nepal in the operation of the project. 6 Provisions related to electricity purchase 6.6.1 Purchase of electricity for the purchase and sale of hydroelectric power produced by the private sector except in the case of self-distribution within the dominion of Nepal.However, it will not be necessary to enter into a purchase and sale agreement for the electricity produced by itself to be consumed in a specific industry of Nepal. 6.6.2 The electricity purchase agreement must be transparent.

6.7 6.7 Provisions related to visas Non-tourist visas and work permits will be provided to the investors of the hydropower project, their authorized representatives and the necessary foreign experts, skilled manpower and their families as stipulated in the contract for the construction and operation of the project.

6. 8. Maximum utilization of local resources and means 6.8.1 Development of projects by the country's construction businessmen and consulting donor organizations will reduce the cost of hydropower, so foreign businessmen will be encouraged to associate with local organizations. 6. 8.2 The person who has received a permit to construct or operate a hydroelectric project must work in such a way that the technology is transferred to Nepalese citizens in the course of working according to the permit. In addition to using labor, skills, tools and resources, preference should be given to using local labor.

6.8.4 The development of industries that produce construction materials and mechanisms used in the power sector will be encouraged.

6.96.9 Investment Risk Management

6.9.1 Hydropower projects, transmission systems and distribution systems established by the private sector will not be nationalized throughout the license period. 6.9.2 Foreign individuals, firms or companies investing in electricity generation, transmission or distribution projects to be built by the private sector will be provided with the same facility to take the following amounts back outside Nepal in foreign currency according to the prevailing exchange rate:

(a) The amount required to pay the principal and interest of the approved loan taken in foreign currency for the hydropower project.
(b) If electricity is sold within Nepal, the amount received as profit or dividend for foreign investment.
(c) NoIn the case of export electricity projects, 100 percent of the amount received as loan principal, interest, profit and dividend can be taken back in the currency in which the electricity is sold in Nepal as income.
(d) The amount received from the sale of shares of some or all of the foreign investment can be repatriated in the same currency in which the shares were sold. But if the shares are sold in Nepali currency, only 75 percent of the same will be available in foreign currency.
(e) Other facilities related to foreign currency to foreign investors will be in accordance with the prevailing Foreign Investment and Technology Transfer Act. In order to reduce the impact, it will be arranged that the period of the production permit can be extended by a maximum of 5 years after evaluating the nature and impact of the risk as a compensation. Customs and value added tax facilities will be provided as per the new plan.

6.9.5 Licensed companies, organized organizations or individuals can request If the Government of Nepal deems it necessary, it can arrange the security of such a project. Thus, in the event that the Government of Nepal makes security arrangements, the actual cost of such security arrangements shall be borne by the licensed company, organized organization or individual. If there is any loss due to the company, organization or person receiving the permit, such loss shall be as mentioned in the contract. The permit period can be extended by assessing the price. 6.9.8After granting the permit from the Government of Pal, it will not be canceled in violation of the conditions mentioned in the permit. If the permit is revoked in this way, the government of Nepal will have to bear the compensation for the actual damage caused by it. However, in the event that the company, organization or individual who received the license does not act in accordance with the progress, goals, quality, etc. mentioned in the license, the government of Nepal may cancel the license and in such a case, the government of Nepal will not bear any kind of compensation.

6 9.9 Based on the conditions mentioned in the permit, the government of Nepal will give prior notice in writing to the company, organization or person who received the permit before canceling the permit. There will be a clear provision regarding the procedure for giving, the warning or instructions to be given after the clearance is obtained and then the action to be taken if the conditions of the permit are violated. p>

6.9.12 No additional or new tax, fee, duty or government revenue of any name shall be levied on previous hydropower generation projects except in accordance with the agreement made at the time of the issuance of the project permit. Regarding the permits or contracts granted before the implementation of this policy, it will be as mentioned in the permits or contracts. The establishment of such industries will be encouraged. 6.10.2 Private producers will be able to determine the tariff rate of electricity generated from hydropower projects of up to 1 megawatt capacity operated by the private sector and not connected to the national system. .

6.10.3 Individuals or organizations licensed to distribute electricity shall determine separate electricity tariff rates for sale to their various consumers.

6.10.4 Additional Energy consumption within the countryNecessary provisions will be made in the electricity tariff structure for this. In order to manage the demand, arrangements will be made regarding the distribution, distribution, and distribution of electricity in order to match the supply of electricity. Arrangements will be made to give special discounts.

6.116.11 Arrangements for electricity export

6.11.1 If the electricity produced in the country is to be exported abroad, it will be in accordance with the agreement between the exporter and the government of Nepal. 6. 11.2 Up to 10 percent of the electricity produced from export-oriented projects can be bought and taken by the government of Nepal for domestic use if deemed necessary. For this, the necessary study will be done to expand the electricity system at the bilateral and regional level.

6.11.4 Non-electrical benefits such as irrigation and flood control will be evaluated so as to get the maximum benefit from the multi-purpose project with a large reservoir, keeping in mind the national interest. Such benefits will be utilized to the maximum extent within the dominion of Nepal. The benefits to be obtained will be more for Nepal and will be determined fundamentally through negotiations with the lower coastal countries. Permission for the implementation of such projects will be granted under this policy with the approval of the Government of Nepal. However, the issue of distribution of natural resources will be beyond the scope of this policy.

6.11.5 The organization that obtains the power generation permit will have to provide necessary support to the Government of Nepal to obtain non-electrical benefits from the project. 6.11.6 If it is necessary to complete the power purchase agreement to be exported abroad, the Government of Nepal can provide appropriate assistance. 6.126.12 Arrangements regarding Permits 6.12.1 It will be arranged that the local people can also directly benefit from the operation of the hydropower generation project. Provisions regarding this will be included in the agreement with the licensee. of thisIn addition, 10 percent of the amount received as royalty will be provided to the district development committee of the districts affected by dams, reservoirs and power plants built for power generation to be spent on the development and construction of those districts in accordance with the local autonomous government regulations.

6.12.2 Hydropower generation In the classification of the center, in addition to the capacity of the project, the following topics will also be taken into consideration: (1) Internal demand supply center
(2) Electricity exporting center
(3) Centers to be built by the same industry so that at least 60 percent of the energy is consumed in a particular industry) ) Study/Survey Permit
(2) Production Permit
(3) Broadcast Permit
(4) Distribution permit

(b) No permit shall be taken for hydropower projects with a capacity of up to one megawatt. Before starting the work of such hydroelectric projects, it has to be registered with the District Water Resources Committee. The information registered in this way should be given to the Electricity Development Department. The grounds for registration of such projects will be as determined by the Government of Nepal. Such projects will get facilities according to this policy.

(c) In order to obtain a permit, a formal application must be made to the Electricity Development Department. The study/survey permit for hydropower projects up to 10 megawatts will usually be given within 60 days of submitting all the details. All other types of permission will be given within 120 days after submission of all the details.

6.12.4 Detailed survey of hydropower projects with a capacity of more than 10 megawatts that have been studied by the government for electricity consumption in Nepal and proposal for permission to generate electricity. It will be invited and awarded on the basis of competition. Permission will be granted within 120 days after submission of all the details. Those who get the study/survey permit must apply for the production permit within the period of the permit. productIf the application for permission is not given, the study/survey report will come under the ownership of the Government of Nepal. On the basis of such study report, the Government of Nepal can generate electricity from the project by itself or through any other company on the basis of competition. If the production permit of such a project is given to the private sector by using the study report, the reasonable cost of the study/survey of the project can be recovered from the production permit holder. An application must be made for permission. If the application for the production permit is not given, the study/survey report will come under the ownership of the Government of Nepal. On the basis of such study report, the Government of Nepal can generate electricity from the project by itself or through any other company on the basis of competition. If the production permit of such a project is given to the private sector by using the study report, the appropriate expenses incurred in the study/survey of the project can be recovered from the person obtaining the production permit. It can grant permission to export electricity from projects with more connected capacity. Permits for such projects will be granted by the Government of Nepal by calling for proposals or by negotiating with the applicants who apply for permits.

6.12.8 Permits will be issued by the Ministry of Water Resources.

6.12.9 Permits The grounds for granting will be made transparent. 6.12.10 The Government of Nepal may enter into a project agreement with the applicant party as required to attract private, domestic or foreign investment. 6.12.11 Duration of the permit.
(2) Hydropower Production Permit: The duration of the production permit will be as follows depending on the nature of the project.
(a) Project to supply internal demand: 35 years from the date of obtaining production permit.
(b) Hydropower project for export: Ut30 years from the date of obtaining the permit.
(c) In the case of renewable energy produced by a domestic industrial business using at least 60 percent of the energy itself: As long as the relevant industry remains in operation. Up to 30 years from the date of obtaining the production permit if the industry is not in operation. (d) Based on the construction period for reservoir projects, the production permit can be extended for a maximum of 5 years.

(3) Power Transmission and Distribution Permit Permits must be obtained for power transmission and distribution.
(a) The Government of Nepal may designate any transmission line or grid as a national transmission line or grid (b) The duration of the electricity transmission license shall be 25 years from the date of receipt of the license.
(c) The duration of the electricity distribution license will be 25 years from the date of obtaining the license.
(d) With respect to the period of the permit for electricity generation, transmission and distribution, and also for electricity generation and transmission or distribution only, the period of electricity generation shall be the period of transmission and distribution. It can be renewed once for 10 years.
(f) Transmission and distribution of electricity generated from a power generation center with a capacity of up to one megawatt will be as long as the center is in operation.
(4) If a person is producing and distributing electricity in a specific area while operating independently with or without obtaining a permit, any other person in the same area may request permission to produce and expand more capacity electricity in such a way as to adversely affect the project. However, he will have to purchase and take over the hydroelectric power station, transmission and distribution lines operating there with mutual consent. If there is no mutual agreement as mentioned above, on the basis of national interest, the government of Nepal will make arrangements to agree to the appropriate compensation of the above-mentioned structure. Obtain license before obtaining production and distribution licenseThe organization will have to provide security as prescribed to the Government of Nepal.

6.12.11 Any licensed producer will be allowed to use the national grid system for transmitting the electricity produced by paying the prescribed fee. For this purpose, the necessary details regarding the use of the national grid system (grid code) and load transmission bases will be prepared. /p>

6.13 Provisions related to fees

6.13.1 Salary fee (royalty)

Hydropower producer shall submit the following salary fee to the Government of Nepal after the production of electricity has started.

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(a) Organization of internal consumption

But the excess electricity from power plants installed for ca[tive use If it is sold in the distribution system, the power will be subject to energy charges like electricity projects above 100 megawatts.

Commercial After 15 years from the date of operation.

(c) Royalty rates mentioned in section (b) above will be levied on projects to be constructed on commercial basis with installed capacity up to 1000 MW. In the case of projects up to 1000 MW that are not constructed on a commercial basis, 15 percent of electricity and energy will be charged annually as a royalty based on the monthly electricity and energy production capacity from the date of production. The bases of (b) and (c) will be decided through negotiations. >

(f) Exported electricity shall be paid in the currency in which it is sold Note hereEnergy Royalty / Capacity

Royalty ;"The following formula is used to derive

Enery Royalty = (Generated Energy – Self consumption) x Average Selling price x Energy Royalty Rate Capacity Royalty = Capacity Royalty Rate x (1 =5/100) year 2058 x Installed capacity (kw)

6.13.2 Register "San Dastur

Registration of documents related to foreign loans to invest in projects related to hydropower generation, transmission and distribution and immovable and movable assets (such as project company shares) for the said loans in the name of foreign lenders" San Dastur 0. 0001 percent will be charged. 6.146.14 Tax and customs related facilities 6.14.1 The income tax levied during the operation of hydropower generation projects, transmission systems and distribution systems shall be as provided by the current Income Tax Act.

p> 6.14.2 In the current situation of no value added tax on electricity tariffs, value addition on industrial machinery, equipment and spare parts imported by the project to be used in the construction of hydroelectric power projects.And it won't take. If value added tax is levied on electricity tariffs, value added tax will also be levied on suitable materials and machinery accordingly. Customs duty will be charged. However, the price of the machinery, equipment and other machinery for which such spare parts will be imported will not exceed 20 percent of the total price. After that, such machinery will have to be taken back. If you can't take it back or if you don't go, you will have to pay the customs duty according to the project. 6.156.15 Institutional arrangement 6.15.1 Institutional arrangements will be made as follows for the development of hydropower: (1) Regulatory body The current Electricity Tariff Determination Commission as the regulatory body. will be developed. This regulatory organization will be able to direct and supervise as necessary, taking into account the power purchase agreements of public and private sector producers in the course of monitoring and supervising the quality of electricity. The functions of the regulatory body will be as follows: a) Determining electricity tariffs and wheeling tariffs, monitoring and supervising the security of the electricity system and regularity of supply and the quality of electricity, protecting the interests of consumers, preparing grid codes, load transmission. Approving the bases of electricity, preparing the basis of protection and quality of electricity, etc.

(b) Electricity generated from hydropower plants can be bought and sold with the mutual consent of the producer and the buyer. Before entering into a power purchase agreement, the basis for determining power purchase and sale rates should be reviewed by the regulatory body. The regulatory body must review and give an opinion within 45 days of receiving the request for review. Conducted by the regulatory body for the purpose of determining electricity tariffThe basis will be the review of the electricity purchase agreement.

(c) The tariff rate of electricity to be sold and distributed to consumers will be determined by the regulatory body. While determining the tariff rate, the interest of the consumer will also be kept in mind. Providing facilities under the policy and attracting the private sector to hydropower development, encouraging private participation in hydropower projects, working on the approval of hydropower projects with a capacity of more than 1 megawatt to make the best use of water resources, studying the feasibility of hydropower projects and Carrying out studies of multi-purpose projects, providing necessary support to the private sector in the implementation of projects and carrying out monitoring and promotional activities. Initial identification of electricity projects, various policy research activities for electricity development.

(3) Electrical Energy Management Study Institute: To study and research

on the financial, legal, environmental and technical aspects of electricity. And an electrical energy management study institute will be developed to provide related training.

6.15.2 Operation of power stations owned by Nepal Electricity Authority, power transmission and national grid operation and power distribution shall be divided respectively for that. Appropriate institutional arrangements will be made. An autonomous public organization will be entrusted with the operation of the national grid. Local bodies, community-cooperative organizations and the private sector will be encouraged in the operation of the electricity distribution system.

6.16 Construction and operation of hydropower projects by the government.It can build and operate hydropower projects according to the treaty or agreement with foreign countries or international organizations.