Private sector entry into electricity trade nearing approval, Energy Minister says

KATHMANDU: The government is preparing to issue Letters of Intent (LoIs) to private companies to enter electricity trading, with the necessary policy arrangements nearing completion, Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha said on Wednesday.

Reviewing his ministry’s work over the past six months, Shrestha said the government had advanced plans to expand electricity generation, transmission infrastructure, power markets and domestic consumption as part of efforts to make the energy sector a foundation of economic development.

He said the ministry had also developed scientific and objective criteria for processing Power Purchase Agreements (PPAs) based on national needs and electricity system demand. The proposed criteria prioritize projects that can supply power during peak evening demand in the dry season, contribute electricity during dry months, maintain stable monthly production and have adequate transmission infrastructure to evacuate power by their Required Commercial Operation Date (RCOD).

During the review period, the RCOD was extended for 27 hydropower projects with a combined capacity of 540.47 megawatts, all in the final stages of construction.

Shrestha also said Nepal and India had agreed to increase cross-border electricity import capacity from 1,000 megawatts to 1,400 megawatts and export capacity from 1,100 megawatts to 1,650 megawatts. Work has also progressed on expanding cross-border transmission infrastructure, introducing open access and establishing transparent transmission tariff calculations.

Transmission infrastructure expansion

Construction of the long-delayed Hetauda-Dhalkebar-Inaruwa 400-kilovolt transmission line in the Hetauda area has reached its final stage, according to the minister. The Bahrabise-Lapsiphedi 400-kilovolt transmission line has been completed, while the Bahrabise and New Khimti substations have been completed and partially brought into operation.

The Markichowk-Bharatpur 220-kilovolt transmission line under the Marsyangdi corridor, the Dhalkebar-Balganga 132-kilovolt line and the Lalbandi-Salempur 132-kilovolt line, along with related substations, have also entered operation.