Finance Minister Mahat’s instructions to the Insurance Authority to move the Insurance of Hydropower Projects to Non-Tariff

Kathmandu : Finance Minister Dr. Prakash Sharan Mahat has instructed to move the insurance policy of hydropower projects to Non-Tariff (without any charge).

Speaking at the workshop on “Hydropower Insurance Policy and Approach” organized by Independent Power Producers’ Association, Nepal (IPPAN) in collaboration with Avon Reinsurance Broker Company, Finance Minister Dr. Mahat said that hydropower projects should be insured in accordance with the open market policy.

Mahat said,”This is wrong practice of tariff and non-tariff which is being seen and happening. Leave the market free.” He also said, “We have to go with the market rate and it should be based on what the real risk is. It is not justified to pay a lot even for a small risk.”

Finance Minister Mahat said that insurance is taken to transfer the risk, and emphasized that everyone should not face problems at once and if the problems is there then insurance should do their duty and help them within the time.

He said that it is very disappointing that the flood-damaged projects did not received their claim payments even after 9 months of the incident, and urged the insurance companies not to give more importance on selling insurance only but should give more focus on providing claim payment on time as well. He also said that if insurance company wants to stay in the market then they should learn how to provide claim payment to the needy one, not only selling the insurance policy and said that business is two ways not one way process.

Mahat expressed happiness that the energy entrepreneurs who entered the sector when the private sector was opened up after 2046 B.S are now building big projects.

Mahat further said that the government is discussing to facilitate the issue of forest and environment. He also said that due to migration of people from village to the towns for opportunities, the amount of forests are increasing itself, before the forest covered 45 percent land of Nepal which has increased to 47 percent now.

Mahat said that some documents were not received regarding the flood-affected project due to which they are not getting customs exemption. So, they have to wait until the cabinet makes master list regarding the damaged goods and necessary items for recovery.

Mahat also said that a decision will be taken after a comprehensive discussion in the upcoming budget regarding VAT exemption on machinery equipment.

While answering the questions raised by IPPAN in the program, Finance Minister Mahat also promised to talk to the Central Bank of Nepal about the issue of increasing the re-loan limit and projects that could not be financially managed.