Nepal and India Agree on Electricity Import Rates for Next Year

Kathmandu. Agreement has been reached for Nepal to import electricity from the Indian states of Bihar, Uttar Pradesh, and Uttarakhand for the next year. This consensus was reached during the 17th meeting of the Nepal-India Electricity Exchange Committee held in Pokhara on Falgun 28 and 29.

The Nepal Electricity Authority (NEA) informed that the process of purchasing electricity through the PEC for electricity exchange between Nepal and India has been continuously operational since 1992.

The NEA stated that this mechanism, operational for over three decades, has established itself as a significant foundation for Nepal-India energy cooperation. Hitenra Dev Shakya, Executive Director of the Nepal Electricity Authority, informed that the meeting determined the electricity purchase rate for the upcoming year.

The NEA's Board of Directors had authorized the Executive Director to negotiate the electricity purchase rate and sign the agreement at the meeting. The committee had authorized the Executive Director to negotiate the electricity purchase rate and sign the necessary agreement at the meeting.

During the negotiations, the Indian side mentioned an increase in costs related to electricity generation and supply and proposed a 5.5 percent increase in the electricity purchase rate.

Nepal, on the other hand, stated that based on the study of the Indian electricity market and available market indices, the current market rate is relatively low, indicating no need for a rate increase.

Following detailed discussions and deliberations between both parties, the NEA informed that an agreement was reached to increase the rate set last year by only 1.5 percent, which is the same rate of increase as the previous year.

According to the agreement, the rate for electricity purchased through the 132 kV transmission line for the current year has been set at NPR 8.22 per unit, NPR 8.91 per unit at the 33 kV level, and NPR 9.55 per unit at the 11 kV level. Furthermore, it was agreed to conduct a detailed review and discussion on the structure of the electricity purchase rate again next year.

The agreement is expected to further strengthen Nepal's electricity supply management during the dry season, which falls in the months of Chaitra and Baisakh. Currently, the NEA is importing approximately 12 to 14 thousand megawatt-hours of electricity daily, and this volume is projected to increase as energy demand rises during the dry season.