Government Open to Private Sector Participation in Cross-Border Power Trade: Energy Minister

KATHMANDU; The government has expressed its willingness to allow private power producers to participate in cross-border electricity trading under a Business-to-Business (B2B) model.

During a meeting with representatives of the Independent Power Producers' Association of Nepal (IPPAN) on Friday, Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha said the government is working with the Nepal Electricity Authority (NEA) to develop a framework that would enable private companies to access international electricity markets.

Shrestha said private sector participation is essential to expand Nepal's clean and reliable energy exports in the increasingly competitive regional market. Although private companies have played a major role in electricity generation, they have had limited opportunities in cross-border trading.

"The government is examining whether the existing legal framework is sufficient or if new legislation is required," the minister said. He added that opening electricity trading to the private sector could create new investment and business opportunities as Nepal advances its energy consumption and export strategy.

The minister stressed that the NEA's role and responsibilities must remain protected, while ensuring that state revenues are not affected. He said the government is conducting detailed studies on issues such as open access to transmission infrastructure, shared grid usage, responsibility sharing, and digital management of electricity trading.

Former Energy Secretary Dinesh Kumar Ghimire said private sector involvement is vital for developing a competitive electricity market. He argued that electricity trade should support not only exports but also domestic market expansion and growing energy demand, recommending amendments to existing laws or the introduction of new legislation if necessary.

IPPAN President Mohan Kumar Dangi urged the government to adopt policies that encourage genuine investors, saying private sector participation in electricity trading and transmission has become a necessity rather than a choice.

IPPAN Senior Vice President Uttam Vlon Lama said a multi-seller, multi-buyer system would promote competition, ensure fair pricing, and expand market opportunities. He called on the government to immediately establish the necessary legal framework, even if it requires amendments to existing laws.

Participants concluded that allowing private companies to leverage their experience in power generation for electricity trading would strengthen Nepal's energy sector, attract investment, and boost the country's export potential.