Nepal plans to do away with licensing requirements for small hydro plants of capacities up to 10MW. Licences are currently required for all projects producing more than 1MW of power.

The Nepali government intends to attract private investors to the small hydro power sector by eliminating the licensing requirements.

However, producers will still be required to sell the power to the state-owned Nepali Electricity Authority (NEA), which controls the distribution of electricity.

Under the new arrangements, NEA would set the rates and amount of electricity it would buy and give market guarantees to producers.