According to a report by the Press Trust of India (PTI) on January 10, 2022, the Nepal Power Exchange Ltd (NPEL) signed a trading agreement with India’s Manikaran Power Ltd. The agreement states that the NPEL will sell electricity produced by the domestic private sector to India via Manikaran, an Indian energy firm. The NPEL is a subsidiary of a non-profit, non-governmental autonomous organisation called the Independent Power Producers’ Association of Nepal (IPPAN). The purpose of the organisation is to encourage the private sector to work in the area of hydropower in Nepal.
The trade agreement is a first for the private sector of Nepal and India. IPPAN said in a statement that the signed agreement aims to facilitate power trading between the two countries. The non-profit organisation further said that the managing director of the NPEL, Ashish Garg, and the managing director of Manikaran, Navjeet Singh Kalsi made the deal in the presence of Nepal’s Energy Minister Pampha Bhushal during a programme organised by IPPAN.
Under the agreement, Nepal will sell 500 MW of electricity to India in the initial phase and Manikaran Power will invest in 15 percent of the shares belonging to the NPEL, amounting to a total of NRs 300 million. Previously, only the Nepal Electricity Authority (NEA) exported electricity to India. As per a Nepalaese news portal – My Republica – since the issuance of the NPEL license, the Nepal government plans to issue more licences to private sector companies to carry out the cross-border power trade.
Additionally, Bangladesh has also shown interest in signing power purchase agreements directly with Nepal’s private sector hydropower producers. At the Nepal Power Market Summit 2022 in Kathmandu on January 10, Energy Minister Bhushal spoke about Nepal’s plan to export surplus electricity to India by increasing its current electricity generation capacity, which comes to around 200 MW during peak hour. He further appreciated the role played by the Nepalese private sector in advancing hydropower development, and reaffirmed the Nepalese government’s commitment towards facilitating the domestic private sector to directly sell electricity in the Indian market.