The Independent Power Producers' Association, Nepal (IPPAN) on Tuesday, Kartik 10, welcomed the government's decision to issue letters of intent to private-sector companies for preparing cross-border electricity trade, while calling for assurance that they will receive the licences needed to proceed. The association said the decision creates an opening for private producers, who had previously been limited to electricity generation, to seek markets, identify potential partners and prepare power purchase and sale agreements.
A new preparatory role for private producers
IPPAN said the letters of intent allow private-sector companies to begin work on the commercial preparations involved in trading electricity across borders. That includes looking for potential markets and partners, as well as preparing agreements for the purchase and sale of power. The decision therefore expands the role available to private companies beyond generation, according to the association's statement.
The association described the move as an opening for the private sector in electricity trade. Its response focuses on the preparatory opportunities made possible by the letters, rather than suggesting that companies can begin trading immediately. The distinction is significant to IPPAN's request: it welcomed the government's decision, but also called for clarity about the licences private companies will require.
For producers, the ability to explore markets and counterparties is a practical step toward preparing cross-border transactions. IPPAN's statement identified these activities as part of the opportunity now available to the private sector. Companies can begin considering where power might be sold, who could participate as a trading partner and what purchase or sale arrangements may need to be prepared.
Licence assurance remains central
IPPAN also demanded assurance that private-sector companies will receive the required licences. Its welcome for the letters of intent was therefore accompanied by a request for confidence that the licensing arrangements will support the next steps. The association's position links the government's decision to issue the letters with the need for a clear route for companies to obtain permission to carry out the trade they are preparing for.
The statement does not treat the letter of intent and the required licence as interchangeable. Rather, IPPAN's call for assurance points to licensing as a separate concern for companies seeking to move from preparation toward electricity trade. Without the assurance it is requesting, the association's message suggests, the new opportunity would remain incomplete for private producers. IPPAN did not, in the information available, specify the form of assurance it wants or detail a timetable for licences.
The association's demand also puts the emphasis on implementation. The letters can provide a basis for companies to identify markets, partners and possible agreements, but IPPAN wants the government to make clear that the permissions needed for those plans will be available. Its response thus combines support for opening the sector to private participation with a request for certainty about the regulatory step that follows.
Private-sector participation in cross-border trade
IPPAN's statement marks a change from the limited role it says private producers previously had, when their involvement was confined to generation. The newly announced letters of intent offer them scope to take part in preparations related to cross-border sales and purchases. The association welcomed that shift while making clear that the availability of licences is an important condition for private companies seeking to participate.
The decision, as described by IPPAN, gives the private sector room to start exploring commercial possibilities; it does not, by itself, answer the association's concern over licensing. The next issue raised by the statement is whether companies will receive the required permissions to act on the markets, partnerships and agreements they prepare. IPPAN's response is therefore both supportive and conditional: it welcomes the government's opening to private participation and seeks assurance that the necessary licences will follow.
