Nepal opens door to private power traders, but legal hurdles remain
Summary
The government has opened the door for private firms to prepare for cross-border electricity trading by issuing letters of intent, but they cannot begin actual trading until the Electricity Act is amended and licences are granted. The move marks a new phase in Nepal’s power sector, though major legal, regulatory and India-related approvals still stand in the way.
Key Points
- The Ministry for Energy, Water Resources and Irrigation has decided to issue letters of intent to private firms interested in cross-border electricity trading.
- Private companies cannot trade electricity until the Electricity Act is amended and formal licences are issued.
- Twelve companies, including Nepal Power Exchange and NIFRA Trading and Energy Exchange, have applied for the letters of intent.
- The Electricity Regulatory Commission has fixed a wheeling charge of 57 paisa per unit, but the rate and related rules are still under review.
