IPPAN Signs MoU for International Renewable Energy Certificates

The Independent Power Producers’ Association, Nepal (IPPAN) has signed a Memorandum of Understanding (MoU) to acquire International Renewable Energy Certificates (I-RECs), marking a significant step towards Nepal’s participation in global carbon trading. The agreement was signed by IPPAN Chairman Ganesh Karki and ProClime CEO Kavin Kumar Kandasamy at a recent event in Kathmandu. This development comes as the private sector’s role in Nepal’s power production continues to expand.

Under the agreement, 2,000 MW of electricity will be eligible for carbon trading in the first phase out of the 2,700 MW currently generated by Nepal’s private sector. This initiative is expected to generate approximately Rs 1 billion annually from carbon trading, according to IPPAN Chairman Karki. ProClime CEO Kandasamy emphasized that while India, Bhutan, and Sri Lanka have already been benefiting from carbon trading, Nepal is now poised to enter the market.

At the event, International Hydropower Association (IHA) Vice Chair Sushil Pokhrel noted that Nepal’s hydropower projects meet sustainable development criteria, making them eligible for carbon trade incentives. Electricity Regulatory Commission Chair Dr. Ram Prasad Dhital launched Nepal’s first I-REC carbon footprint calculator, which is designed to assess and enhance Nepal’s carbon trading potential. Dr. Dhital pointed out that despite Nepal’s immense hydropower potential, the country has only generated 300,000 MW so far and must now focus on tapping into the growing carbon trading market.

Joint Secretary of the Ministry of Forests Dr. Maheshwar Dhakal highlighted that while Nepal has gained small-scale benefits from carbon trading through forest conservation, there remains significant untapped potential in hydropower. Senior energy expert Prabal Adhikari stressed that Nepal should leverage its hydropower trade in regional markets to maximize carbon credit benefits.

Global Carbon Council Manager Ashok K. Chandel and Eric Solheim of the Global Renewal Alliance stated that Nepal should take full advantage of its strategic position between China and India to enhance its carbon trading profits.

Established in 2001, IPPAN serves as a link between the private sector and government agencies, ensuring that Nepalese citizens gain maximum benefits from hydropower development. ProClime, a global climate-first service provider, specializes in carbon projects, carbon trading, and climate investments, working with governments, businesses, academia, and financial institutions to promote sustainable climate solutions.

The MoU marks a crucial milestone for Nepal’s private sector, paving the way for greater participation in global carbon trading while strengthening the country’s commitment to sustainable energy.