Kathmandu: Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha has said that private sector participation has become essential for expanding Nepal’s clean, green, and reliable electricity competitively in the regional market. He said the government is currently studying whether the existing legal framework is sufficient or if new legislation is needed to facilitate this.
Speaking during a discussion with office bearers of the Independent Power Producers’ Association, Nepal (IPPAN) at the ministry on Friday, Minister Shrestha said that while the private sector has made a significant contribution to electricity generation, its role in electricity trade remains limited. Considering the expansion of the regional energy market and growing commercial opportunities, he stressed that timely decisions are needed regarding the private sector’s role in power trading.
He also clarified that the government is positive about granting the necessary approvals for selling electricity in the international market through a Business-to-Business (B2B) model in coordination with the Nepal Electricity Authority (NEA). He added that as the Energy Consumption and Export Strategy moves into the implementation phase, electricity trading could become a new investment and business opportunity for the private sector.
Minister Shrestha stressed that while allowing the private sector to participate in electricity trading, it is essential to safeguard the role, authority, and responsibilities of the Nepal Electricity Authority (NEA) and ensure that the state’s returns and benefits are not compromised. He added that detailed studies are needed on issues such as open access, the shared use of transmission infrastructure, the allocation of responsibilities, and digital electricity trading management.
Expressing confidence that the expansion of the energy sector would make a significant contribution to the national economy, he said the sector could become a key pillar in achieving the government’s target of building a NPR 100 trillion economy. He noted that transmission line expansion has been prioritized in the current fiscal year, while strengthening the electricity distribution system will be the focus next year. In this context, he urged the private sector to begin preparing for electricity trading.
During the discussion, former Energy Ministry Secretary Dinesh Ghimire said private sector participation is essential for developing a competitive electricity market. He stated that involving private companies in electricity trading would help effectively market surplus electricity during the monsoon season, ease pressure related to Power Purchase Agreements (PPAs), and ensure fair pricing for electricity.
He stated that electricity trading should not be limited to exports alone, but should also focus on expanding the domestic market. He suggested that, if necessary, the government could either enact new legislation or amend existing laws to allow private sector participation in electricity trading.
Former IPPAN President Ganesh Karki noted that many hydropower projects worth billions of rupees are still awaiting Power Purchase Agreements (PPAs). He said allowing the private sector to engage in electricity trading would also help ease the pressure on pending PPAs.
IPPAN President Mohan Dangi said private sector participation in electricity trading and the transmission system is no longer an option but a necessity. He stressed that the government should adopt policies that encourage genuine investors and create a more investment-friendly environment.
During the program, IPPAN Senior Vice President Uttam Bhlon gave a presentation, stating that a multi-seller, multi-buyer market model would help establish a competitive electricity market. He emphasized the urgent need for a legal framework that would allow Nepal to sell electricity in the regional market based on demand, pricing, and timing. If necessary, he urged the government to amend existing laws to open the electricity trading sector to private companies.
Participants in the discussion concluded that the private sector’s experience in electricity generation should now be leveraged in electricity trading and market expansion as well, helping make Nepal’s energy sector more competitive, investment-friendly, and export-oriented.
Nepalpurbadhar