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The Office of the Auditor General has suggested that the government make necessary arrangements after finding that there is no clear accounting of the electricity being generated under the national pride project Rani Jamara Kulariya Irrigation Project.

Through its 63rd Annual Report, the Auditor General’s Office recommended preparing an accurate record of the electricity produced by the project and recovering the revenue from electricity sales through the Nepal Electricity Authority.

The project is currently generating 4.71 MW of electricity. According to the project, regular power generation began in November/December 2023 and has been connected to the national transmission system of the Nepal Electricity Authority.

Although the project is primarily operated as an irrigation scheme, the start of electricity generation has created enthusiasm among local residents and project officials. However, a clear decision has yet to be made regarding its operational modality and revenue management. According to the project, electricity generation became possible after an eight-meter water head (elevation) was made available in the Tarai region.

The report of the Office of the Auditor General has raised concerns, stating that no decision has yet been made on how to manage the electricity generated alongside irrigation operations, on what basis the revenue earned from it should be shared, and what kind of operational structure should be adopted.

Although the Ministry of Energy, Water Resources and Irrigation has stated that necessary preparations are underway, a concrete decision has still not been reached for a long time. Earlier, on May 25, 2021, an agreement was signed between the ministry and the Nepal Electricity Authority regarding the management of electricity generated by the project.

The agreement had a validity period of one year and included a provision requiring a Power Purchase Agreement (PPA) to be signed within that period.

However, although the power plant built through the project’s irrigation canal system was brought into operation and handed over to the project on January 15, 2025, a formal Power Purchase Agreement (PPA) has still not been signed.

According to the report of the Office of the Auditor General, a total of 26.056 million units of electricity generated by the project have already been utilized by the Nepal Electricity Authority. However, the project has not yet received any payment from electricity sales.

The Auditor General’s Office has also drawn the attention of the concerned authorities, stating that although the agreement required the PPA to be completed within one year, the process still remains unresolved even after more than three years.

Jalasarokar