The government has moved ahead with the process of opening new Power Purchase Agreements (PPAs) for electricity projects, with the Nepal Electricity Authority (NEA) beginning work on the framework required to issue new agreements.

A meeting of the NEA Board of Directors held on Thursday and chaired by Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha decided to move the process forward.

The meeting formed a sub-committee to develop the necessary standards and criteria for issuing new PPAs. The committee has been tasked with determining the requirements that will apply when the NEA resumes signing new power purchase agreements.

The sub-committee is being led by NEA Board member Anshu Kiran Shahi. It has been given a short timeline and is expected to prepare its recommendations and present them to the NEA Board within one week.

The committee includes Shaligram Bhandari, Deputy Director General of the Department of Electricity Development, and Ministry of Energy expert Riwaj Sharma. The Director of the NEA's Business Section will serve as the member secretary.

The formation of the committee is the first step toward establishing the framework under which new PPAs can be issued. Once the criteria are prepared, the recommendations will be submitted to the NEA Board for consideration.

A PPA is an agreement under which the electricity generated by a power project is purchased by the NEA at an agreed price and under specified conditions. Such agreements are important for developers because they provide a framework for selling electricity generated by their projects.

The government's decision comes as Nepal's power sector continues to see strong interest in new hydropower development. The availability of a clear PPA framework is important for projects seeking to move from development and financing stages toward construction.

The sub-committee will therefore need to establish the conditions under which new agreements can be issued while considering the broader requirements of Nepal's electricity system.

The recommendations are expected to provide the NEA Board with a basis for deciding how new PPAs should be opened and which projects can qualify under the new framework.

With the committee required to submit its findings within a week, the government has set a relatively short timeline for the next stage of the new PPA opening process.