Energy Investors Warn Lawmakers Over Controversial Power Deal Clause

As Nepal’s Parliament prepares to pass the national budget, private energy producers have stepped up pressure on lawmakers, warning against the inclusion of the controversial ‘take-and-pay’ clause in electricity purchase agreements.

Despite reports of possible revisions, energy entrepreneurs remain firm in their protest. On Monday, they sent mass SMS alerts to chief whips of all major political parties, calling for the immediate removal of the provision, which they say threatens future investment in the hydropower sector and could bring back power shortages.

The clause, introduced in the May 29 budget, applies to run-of-river hydropower projects and states that producers will be paid only for the electricity used, not for what is generated. Private developers argue this discourages investment, risks load-shedding, and could cripple the energy sector and national economy.

The Independent Power Producers’ Association of Nepal (IPPAN), which has led the opposition, said its peaceful protests will continue until the clause is officially removed. Since June 20, the group has submitted memorandums to government leaders and launched social media campaigns, urging a shift back to the “take-or-pay” model that guarantees payment for all generated electricity.

With Parliament set to vote on the budget, investors say the last-minute SMS campaign was a strong reminder to lawmakers: Nepal’s private energy sector is watching closely and won’t back down.