Kathmandu, Nepal, January 11, 2022: Nepal Power Exchange Limited (NPEL), a subsidiary of Independent Power Producers’ Association Nepal (IPPAN), has signed an agreement with Manikaran Power Limited of India to carry out cross border electricity trade.
The agreement is signed amid a special function organized during the event of Nepal Power Market Summit 2022 held in Kathmandu on Monday. The IPPAN has organized the summit with the aim to promote and encourage electricity development in the country.
With the agreement, the monopoly of the state-owned power utility- Nepal Electricity Authority (NEA) in energy trade has come to end. The NPEL will be able to sell electricity produced by the private sector to the Indian company once it get license from the government.
The government is preparing to issue licenses to private sectors allowing them to carry out the cross-border power trade. The Ministry of Energy, Water Resource and Irrigation (MoEWRI), has said that working guideline is being prepared to issue the license to the private companies. It is said that the ministry would able to issue such licenses within few weeks.
The electricity produced in Nepal has huge potential market in India and another neighboring country Bangladesh. Bangladeshi authorities have repeatedly been expressing their concerns to purchase electricity from Nepal.
Though Nepal has about 700 MW energy surpluses in the summer season, it has failed to sell in the international market due to the lack of cross border transmission line. It is believed that the entry of private sector in energy trade would encourage more investment in power production and trade.
According to the IPPAN president Krishna Prasad Acharya, private sectors’ power developers are likely to be producing around 3,000 MW to 4,000 MW of energy in the next few years. Many hydropower companies developed by the government as well as the private sectors are in pipeline to produce more electricity.