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The Nepal Electricity Authority (NEA) has extended the deadlines of 27 hydropower projects with a combined capacity of 540.47 MW to complete construction, providing relief to developers whose projects are making genuine progress but failed to meet their original deadlines.

The deadline extension, formally known as an extension of the Required Commercial Operation Date (RCOD), follows the NEA’s assessment of projects that had signed Power Purchase Agreements (PPAs) but could not complete construction within the scheduled timeframe. Energy entrepreneurs have long demanded such extensions, arguing that developers making genuine efforts should be given additional time while inactive promoters should be discouraged.

The NEA has introduced a new system to classify projects according to their physical progress, deadline status and compliance with key obligations under their PPAs. The authority expects the system to make project management more transparent and accountable and help projects that are genuinely progressing move toward completion and connection to the national grid.

The NEA has categorized the projects into four groups based on physical progress, RCOD status, and the obligations the developers are required to fulfill under their PPAs. The NEA board meeting held in mid-July decided to classify the projects based on clear criteria for the first time.

Projects in Group A are those whose deadline has not expired and that have met key requirements such as securing production licenses, arranging finances, and managing land. Group B covers projects delayed mainly due to NEA’s transmission line or substation works, as well as expired projects with more than 25 percent construction progress. These will be closely monitored by the Electricity Trading Department.

Group C includes projects that failed to meet major obligations like licenses or financing on time, or those with less than 25 percent physical progress by the end of the deadline. Group D consists of projects that have not fulfilled obligations or whose survey and production licenses have been cancelled after the deadline expired.

For hydropower projects, physical progress is judged by construction of core structures such as headworks, tunnels, and powerhouses. For solar projects, indicators include land management, panel purchase agreements, letters of credit, and installation of mounting structures.

The NEA stated that the process to extend the RCOD is moving forward for projects in Groups 'A' and 'B' that have submitted the required documents and evidence. According to the NEA, currently, 320 hydropower projects with a total capacity of 8,292 MW are in various stages of construction. Among them, there are 150 projects with a capacity of 4,491 MW in Group ‘A’ and 68 projects with a capacity of 1,420 MW in Group ‘B’.

According to NEA, 30 projects with a combined capacity of about 1,292 MW have already applied for deadline extensions. Their construction progress ranges from as little as 4 percent to full completion.

Meanwhile, private sector energy producers have expressed satisfaction with the RCOD extension process initiated by the NEA—under the leadership of Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha—aimed at facilitating projects where construction is genuinely progressing.