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A high-level government committee has recommended cancelling licences of hydropower developers who fail to move projects forward even after signing power purchase agreements (PPAs), in a bid to address long-standing delays and inefficiencies in the sector.

The committee, formed on 2 April under the Ministry of Energy, Water Resources and Irrigation, submitted its report to Minister Biraj Bhakta Shrestha on Tuesday. The five-member panel was led by Joint Secretary Mohan Shakya.

Receiving the report, Minister Shrestha said the recommendations would be reviewed and taken forward for implementation after legal and technical assessment.

The committee has proposed invoking Section 8 of the Electricity Act 1992 to initiate cancellation of licences for projects that remain stalled for extended periods after securing PPAs.

It has also called for broader reforms in the hydropower licensing system, including replacing the current “first-come, first-served” model with competitive bidding to improve transparency and efficiency.

Among other key suggestions, the report urges harmonising conflicting legal provisions across existing electricity-related laws and policies and clearly defining the roles of federal, provincial and local bodies to avoid overlap in project approvals.

The panel has also recommended setting strict timelines for environmental impact assessments, improving coordination on land acquisition and forest clearance, and introducing a “one-window” system for project approvals.

Officials say the proposed reforms aim to streamline hydropower development and align the sector with national energy priorities.