NEA electrifies 95% of population, plans to issue shares to public


The annual profit of Nepal Electricity Authority (NEA) decreased in the fiscal year 2022-23.

After making a net profit of Rs 13.37 billion in the fiscal year 2021-22, the authority recorded profit of Rs 12.33 billion in the last fiscal year, which ended in mid-July.

Addressing a press conference today marking the completion of two years of his second term at the helm of NEA, Managing Director Kulman Ghising stated that the authority’s profit was dented by decreased power generation from its own and private hydropower stations due to an intensified dry season, resulting in an escalation of electricity imports to meet the rising internal demand.

“In the financial year 2020- 21, the profit of the authority was Rs 6.10 billion which had more than doubled to Rs 13.37 billion in fiscal 2021-22,” Ghising said.

“The authority’s revenue from electricity sales and other sources stood at approximately Rs 81 billion two years ago and it had surged to Rs 118 billion last fiscal.”

Additionally, he noted that the cumulative profit of the electricity authority has surged from Rs 11 billion to Rs 36.67 billion.

Electricity leakages

Through the campaign conducted to control technical and non-technical leakages, NEA has reduced electricity leakage to 13.46 per cent in review period.

In the fiscal year 2015-16, there was a leakage of 25.78 per cent in the electricity system. The leakage had been brought down to 15.25 per cent in the year 2019-20, but it edged up to 17.18 per cent in the fiscal year 2020-21.

In the fiscal year 2022-23, the steps taken to control the leakages were made more systematic and effective, and the leakages were reduced by 3.92 percentage points to 13.46 per cent compared to fiscal 2020-21.

Likewise, the electricity loss in distribution has been successfully curtailed to 9.76 per cent.

Ghising stated that over the last two years, the authority has managed to effectively enhance electricity accessibility through the national distribution system to 95 per cent of the population, a notable increase from the previous coverage of 89 per cent.

“Complete electrification has been achieved in the provinces of Madhesh, Bagmati, and Gandaki. In Koshi Province, the electrification rate is at 95 per cent, Lumbini Province at 98 per cent, Karnali Province at 67 per cent, and Sudurpashchim Province at 82 per cent.”

He further said, “Out of the 753 local bodies, 550 have undergone extensive electrification through the authority’s system, while electrification has been realised in the primary areas of 227 local bodies through solar, small, and micro-hydropower projects, and in the minority areas of 21 local bodies. The groundwork to execute the government’s plan for nationwide electrification within the next two years has been finalised, and the tasks are currently in progress.”

Shares issue

Ghising indicated that the NEA is in the final stages of preparing to issue shares to the general public in accordance with the NEA Act 1984, having acquired the required approvals.

ICRA Nepal has assigned an issuer rating of [ICRANP-IR] AA+ to the entity. Issuers with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations.

Power trade

Nepal initiated electricity exports to India, commencing with 39 MW in November 2021, and the current export capacity has risen to approximately 450 MW.

India’s Ministry of Power is in the process of approving additional projects totalling about 600 MW for electricity export from Nepal to India.

The interconnection of Bihar and 132 kV systems has been established at various locations within Nepal, enabling PTC (Power Trading Corporation) to sell roughly 300 MW of electricity from India’s central grid system through the Bihar grid via transmission lines.

A comprehensive agreement involving India, Bihar State Power Corporation, and the authority has been reached.

To provide electricity to the Haryana state of India, a medium-term power sale agreement of 200 MW has been finalised with the Indian electricity trading company NVVN for a fiveyear period. The agreement is awaiting approval from India’s Ministry of Energy.

Additionally, a tripartite agreement between India, Bangladesh Power Development Board, and the NEA is in the final stages and once signed with facilitate power exports to Bangladesh.