The Independent Power Producers' Association, Nepal (IPPAN) has signed an agreement to acquire International Renewable Energy Certificates (IRIX) for 2,000 MW of electricity generated by the private sector.
IPPAN President Ganesh Karki and ProClimate CEO Kabin Kumar Kandasamy exchanged a memorandum of understanding (MoU) at an event in Kathmandu on Friday in this regard.
Under this agreement, 2,000 MW of the 2,700 MW of electricity generated by Nepal’s private sector will be eligible for carbon trading in the first phase. IPPAN President Karki stated that the agreement would enable Nepal’s private sector to trade carbon worth approximately Rs 1 billion annually.
ProClimate CEO Kandasamy noted that countries like India, Bhutan, and Sri Lanka are already benefiting from carbon trading, and Nepal is now set to tap into this opportunity as well.
Vice President of the International Hydropower Association (IHA), Sushil Pokharel, highlighted that hydropower projects in Nepal are meeting sustainable development standards, paving the way for them to receive financial returns from carbon trading.
At the event, Electricity Regulatory Commission Chairman Dr. Ram Prasad Dhital launched the IRIX Calculator for Nepal. The tool calculates the megawatt-hours of electricity generated and estimates the revenue eligible for carbon trading annually. For instance, if 2,600 MW of electricity from Nepal’s private sector is linked to carbon trade, it could generate approximately Rs 1 billion in annual revenue.
Dr. Dhital emphasized that despite the growing global carbon market, Nepal has yet to fully benefit from it. He pointed out that although Nepal has significant hydropower potential, only around 3,000 MW is currently being generated.
Joint Secretary at the Ministry of Forests and Environment, Dr. Maheshwor Dhakal, noted that while Nepal has received limited funds for carbon sequestration from forests, hydropower projects have not yet capitalized on carbon trading.
Senior energy expert Prabal Adhikari from the Ministry of Energy expressed confidence that Nepal, which is already exporting electricity to regional markets, will soon generate significant income from carbon trading.
Global Carbon Council Manager Ashok K. Chandel and Global Renewable Alliance’s Eric Solheim also addressed the event, emphasizing that Nepal, situated between economic giants China and India, should take full advantage of carbon trading opportunities.
