NEA Eyes Exporting 85.6 MW Electricity to India via NPTC

Kathmandu: The Nepal Electricity Authority (NEA) has taken forward the process to sell about 85.6 megawatts of electricity to India in the upcoming monsoon season through its subsidiary Nepal Power Trading Company  (NPTC).  

The NPTC, in this regard, has started preparations to sell electricity in the Indian electricity market via Tata Power Trading Company Limited, an Indian company. The NEA's subsidiary company is reported to be waiting for approval from Indian side.

Earlier, the NPTC had already received permission of the NEA board to sell electricity to through the Indian Power Exchange in the upcoming monsoon season. In the new scenario, the company however requires a new permission of the Central Electricity Authority of India as it enters the electricity market through Indian company Tata Power Trading.

The groundwork had already been laid for NPTC to move towards electricity trading. The NEA board had initially allowed NPTC to sell electricity from projects that had already signed power purchase and sale agreements with the authority in India and other countries up to 100 megawatts. As per the approval, the electricity could not be sold at the rate less than INR 5.45 per unit and the trading margin could not exceed 10 paisa per unit.

NPTC, despite its long-established status, had not been able to enter the commercial electricity trading business. The company was established in 2016, but the government had granted operating license in December 2021. The NEA holds 51 percent share in the company, while of the Nepal Electricity Authority, Vidhyut Utpadan Company Limited and the National Transmission Grid Company hold 17 percent each, and remaining 15 percent share is owned by the Hydroelectricity Development and Investment Company. The authorized capital of the company is Rs 1 billion.

As of now, the import and export of electricity with India has been carried out by the NEA itself. The government has already approved the NEA to sell electricity to India and Bangladesh, and on that basis, the authority has been conducting cross-border electricity trade. Now, efforts are being made to activate NPTC and move forward with electricity trading through a separate trading entity.

Two weeks ago, the NEA board approved the electricity purchase and sale agreement draft after obtaining consent of the Electricity Regulatory Commission (ERC). The agreement is said to be implemented from November 1, 2026, to May 31, 2029, and there is a provision for increasing the trading capacity in the future with the consent of both the sides.

The ERC on August 18 gave its consent to the agreement draft. After receiving the information of the decision on August 24, the NEA took forward sale of electricity on September 19. Thereafter, NEA's Executive Director Dirghayu Kumar Shrestha has been authorized to sign the agreement on behalf of the NEA.