Confronted by chronic power cuts of up to 18 hours a day, Deputy Prime Minister (DPM) Bharat Mohan Adhikari declared a state of energy emergency on March 23, 2011, and pledged to work towards eliminating the crisis. As part of this initiative, the Government of Nepal, after receiving approval from the Council of Ministers, presented the Energy Emergency Action Plan 2011, an effort aimed at fast-tracking the generation of 2500 MW of electricity by 2016. One of the key elements of the plan was to entice Nepali independent power producers (IPPs) to invest in the hydropower sector. But this required the Nepal Electricity Authority (NEA) to increase the power purchase agreement (PPA)—the rate for electricity sold by developers to NEA—which had remained fairly stagnant for over a decade.
